Insurance sector seeks government evaluation on increasing FDI cap, expects more reforms

The insurance sector has become one of the most in-demand sectors with several products and services being launched daily. With the growing need for insurance covers among people, the competition is also rising. The risen has been aided by digitalisation of the insurance industry. However, the sector demands few reforms from the government to boost it further, helping it provide services to every class. Anik Jain, Co-Founder & CEO, Symbo Insurance believes that the government is working to provide insurances to poorest of poor, there have been many schemes which are playing a significant role in implementing insurance services. 

''Implementation of key government schemes of health and crop insurance will play a significant role in increasing insurance penetration in the coming years. Insurance for once has become a topic of discussion among masses and the success of these schemes should help in building risk based insurance buying behavior," Jain said,

According to a report published by IndiaSpends earlier this year, at least 988 million Indians, more than the population of Europe and 75% of all Indians are not covered by any form of life insurance. Even those who have an insurance policy, are assured of only 8% of what may be required to protect a family from financial shock following the death of an earning member, which itself highlights the scope of improvement in the industry. 

''With the government providing insurance to the poorest of poor, the demand of insurance in middle class and aspiring classes should help insurance industry growth. At some stage in near future, the government should evaluate the value of increasing FDI cap for insurance intermediaries which should help in increased penetration,'' added Jain.

One of the welcome moves by the govt was a recent increase in the revival period of non-linked policies- for life insurance policies which has been raised to two to three years by IRDAI. The surrender period of the policy has been raised as per new rules. Also, the Non-Linked policyholders will get a fixed amount on surrendering the policy after 2 years. The customers who seek more flexibility and ones who could not afford to pay premiums in the last two years can get their policy revived. 

While the government has been doing a good job implementing policies to boost the insurance sector but as insurance is not just a document or a formality, it is an investment in one's portfolio and there is much scope to improve it further.