CHENNAI; The Economic Survey 2018, released on Monday, said insurance penetration -- the ratio of premium underwritten in a given year to the gross domestic product (GDP) -- in India increased to 3.49% in 2016-17 from 2.71% in 2001.
In comparison, some of the emerging economies in Asia such as Malaysia (4.77%), Thailand (5.42%) and China (4.77%) have a higher insurance penetration than India.

The country's life insurance penetration was 2.72% and general insurance penetration was 0.77%; this compares to a global insurance penetration of 3.47% for life and 2.81%.

"Insurance, being an integral part of the financial sector -- should be assessed on the basis of two parameters, viz., insurance penetration and insurance density, which is the ratio of premium underwritten in a given year to the total population," said the survey. "India's insurance density has increased to $59.7 from $11.5 in 2001 - with life insurance density of $46.5 and general insurance density of $13.2. This compares to global average insurance density of $353 for life and $285.3 for non-life," it said.

The comparative figures for Malaysia ($452.2), Thailand ($323.4) and China ($337.1) were higher than India. Crop, motor, health insurance sectors boosted non-life GDP premium growth by 33% year-over-year to Rs 1.30 lakh crore; highest y-o-y growth rate since 2000-01. Life insurance premium grew 14% to Rs 4.18 lakh crore as against Rs 3.67 lakh crore in the previous financial year.

In the last five years, however, there has been a dip in savings via insurance. "There was a significant decline in the proportion of deployment of financial savings in bank deposits and life insurance funds and an increase in share of currency, provident and pension funds, claims on government (primarily in small savings) in 2015-16. Bank deposits accounted for about 50% of the aggregate financial savings between 2011-12 and 2015-16," said the survey.

"Savings held in shares and debentures more than doubled, and within this category, mutual funds segment increased by 126% in 2015-16 over the previous year," the survey added.

The Survey also noted the stellar public debuts of the insurance companies in 2016-17. "As against last year's achievement of Rs 46,247 crore realized from 16 transactions of disinvestment, the budget estimate for 2017-18 was set at Rs 72,500 crore split into Rs 46,500 crore from disinvestment of Central Public Sector Enterprises (CPSEs), Rs 15,000 crore from strategic disinvestment and Rs 11,000 crore from listing of insurance companies," said the survey.