NEW DELHI, Sep 14: Almost 49 per cent of the population in India is not well aware and familiar with insurance products due to lack of information and awareness about insurance products. This has resulted in high incidence of frauds which is impacting Indian insurance sector.
According to a survey conducted by PHD Chamber of Commerce and Industry, around 49 per cent of the population is not well aware and familiar with insurance products in India due to lack of information and awareness about insurance products.
The survey said life insurance has been used more for investment and tax saving purposes in people’s overall financial planning. Despite this, 56 per cent of the survey population has not availed any kind of insurance policy/products due to poor advice, wrong information and lack of understanding of the product, said the survey study.
In India, insurance companies are most affected by misspelling due to premeditated fabrication and fraudulent misrepresentation of material information. Also, insurance continues to be missold with senior citizens being the softest targets as they do not understand new products, said the survey In non-life insurance in India, the motor insurance continues to be the largest segment with a share of 44.14 per cent, the share of health segment being 26.73 per cent and the remaining share contributes to Fire and Marine segments respectively.
Further, the survey has revealed that 50.50 per cent of people consider the premium offered by the company as an important factor while purchasing insurance policy, 24.60 per cent considered company’s credibility, 15.26 per cent considered past records and 5.86 per cent considered consumer base of the company as an important decision factor.
According to survey findings, 33 per cent of the people find insurance products too complicated and technical while 24.68 per cent find it difficult to understand the product. Hence, 74 per cent respondents believe personal interaction is very important before buying insurance products. India’s insurance sector is the biggest in the world with about 1,442 lakh policies and the insurance market is expected to quadruple in size over the next 10 years from its current size of 70 billion dollar, said the PHD Chamber survey.
In Insurance business, India is ranked 11 among the 88 countries with a market share of around 2 per cent in global life insurance market. India stands 15th globally with respect to premium income. In terms of insurance density in India, it increased from 11.5 dollar in 2001 to 55 dollar in the recent years.
Also, the insurance industry is a major component of the economy by virtue of the amount of premiums it collects, the scale of its investment, its contribution to employment generation, infrastructure development and, the essential social and economic role it plays by covering personal and business risks, said Dr Gupta. (UNI)
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