Substantial growth in insurance biz since GST rationalisation: Irdai member

Mumbai, Nov 14 (PTI) There has been a "substantial growth" in insurance business since the September 22 rationalisation in the goods and services tax (GST), sector regulator Irdai's member Deepak Sood said on Friday.

Speaking at an event organised by industry lobby grouping Assocham here, Sood said the government has brought insurance at par with daily necessities by cutting the GST to zero and the onus is now on the industry to deliver by deepening coverage.

He also asked them to ensure that the full benefit of the "paradigm changing" GST rationalisation is passed on to make policies more affordable for the end-consumer.

"What we've seen in October, that is an indication of how things will be. I think both the life insurance industry and the retail health has seen substantial growth, substantial interest coming from people," he said, adding that more good is in store for the industry, given the general trend of higher demand in the second half of a fiscal year.

"We should not measure insurance penetration by the ratio of premium paid to GDP, where India stands at half of the world average, but look at the number of lives which are covered to understand the deepening of insurance in the population," Sood said.

The GDP will continue to grow rapidly to make India the third largest economy by 2030, and the level of premiums in the country is also low, he added.

Amid sporadic natural events, Sood asked insurers to create specific products to address the risks arise because of such events.

He said while some of the events may not classify as "Natcat", or natural catastrophe, because of their relatively limited impact, they are no less than disasters for people and entities that are impacted.

With growing digitisation in the economy and the expected entry of quantum computing, which will make it easier to break what are deemed to be secure passwords, Sood said the insurance industry needs to respond with appropriate products and client awareness initiatives.

Underlining the need to focus on making insurance affordable, Sood said technology use must be maximised to decrease the cost of distribution, and added that it is also essential to ensure no misselling of products and services.

Insurers need to focus more on state-level plans, and start with a campaign to ensure that all vehicles on roads take insurance, Sood said, adding that 55 per cent of vehicles on Indian roads are uninsured.

This has led to costs being borne by the state exchequer in the event of road accidents, Sood said, pointing that "we have 4 lakh accidents a year". PTI AA TRB