Insurance companies are seeking almost a three-fold hike in insurance premium under the Pradhan Mantri Surakhsha Beema Yojna (PMSBY), which has perceived a claim ratio of 200% for the first three years of its operations. The PMSBY provides a ₹2 lakh cover for accidental death and ₹1 lakh for permanent disability. It has provided coverage to 13 crore individuals and settled 14,400 claims from the 19,000 received.
Chairman of a leading non-life insurance company said, "The ₹12 premium was not reviewed earlier as the government had said that they will wait for three years. Considering the 200% claims ratio, we feel that a price of ₹35 would be appropriate."
The move by government to distribute micro-insurance through Jan Dhan Yojana accounts is apparently to increase non-life insurance penetration. It will boost health insurance sector as insurers will be in the best possible position to provide health coverage.
Currently, only Andhra Pradesh and Telangana are the states which don’t provide insurance for social cover. Insurance companies would also like to come with attractive plans to cash in on the opportunity.
With the introduction of the Insolvency and Bankruptcy code, the demand for an insurance cover is also on the rise for insolvency resolution professionals. These are the people who are appointed by lenders to run defaulting companies on their behalf.
*Source: Times of India
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