The non-life insurance industry has finally achieved 1% of GDP in FY2017. The industry has been hovering at the 0.7-0.8% for several years and has finally breached the magical mark this fiscal thanks to government initiatives such as Prime Minister Crop Insurance Scheme.
The non-life (general) insurance industry accounts for 1.04% of the GDP as on March 2017, based on the revised GDP figures. The industry is now worth ₹1.27 trillion, out of which ₹21,000 crore has come in the form of premiums from the crop insurance scheme, says the data collated by the General Insurance Council.
The Central Statistical Office says that the GDP has reached ₹121.9 trillion this financial year, as compared to ₹113.81 trillion achieved last year. This means that the GDP has grown by 7.1% over last year.
The general insurance industry, though happy with the progress, feels that there is tremendous potential to double the existing figures in the coming 5 years. This belief stems from the fact that India is still a highly under-penetrated market as far as insurance is concerned. This statement is better explained, when viewed in a global context. Globally, the insurance penetration average is 3%, so there is still a long way to go if international standards are to be met.
The General Insurance Council believes that the insurance industry’s contribution to the economy will only increase. It says that the revised GDP figures make it clear that the industry has become a significant contributor to GDP growth and the financial services sector; driven largely by products such as crop, motor and health insurance.
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