Petrol pumps and gas dealerships may start distributing standardised insurance products if the sector regulator’s efforts are successful. There are nearly 61,000 fuel pumps in the country and almost 25,000 LPG dealers who can add to the insurance distribution capability in smaller towns and even villages.
Additionally, the regulator IRDAI has already directed companies to come out with simple standardised products on health and term insurance and will shortly come out with guidelines for standard annuity products, which can be brought without much advice.
IRDAI chairman S C Khuntia said that the regulator was in talks with the ministry of petroleum to permit distribution of insurance at fuel pumps and gas agencies. He said that the idea was to enable them to sell simple insurance products to narrow the protection gap in the country.
Khuntia also urged more life insurance companies to go public and list themselves on stock exchanges as the disclosures would increase transparency and build trust. “Insurance is a social protection scheme based on trust, and increasing trust will help improve insurance penetration,” he said.
According to LIC chairman M R Kumar, life insurance business in India is expected to grow 12% to 15% in coming years and will be a major job-creator. Pointing out the protection gap in India, Kumar said, “The Covid pandemic has shown more emphatically than ever how inadequate our efforts have been in insuring India over the last seven decades, since independence… and how crucial a role life insurance plays in ensuring resilience.”
Kumar said that the penetration of life insurance stood at 2.8% in FY19, which marginally increased from the level of 2.7% in FY18. “With the exception of the years between 2006 and 2010, life insurance penetration in India has remained between 2% and 3%. For the last one decade now, India’s life insurance penetration has remained below the world average,” he said.
