‘General insurance could grow thrice the GDP rate’

General insurance products are yet to gain the same level of acceptance in India as life insurance products. The general insurance industry, which includes risk covers for motor vehicles, health, accident and home, has a penetration of just 0.71 per cent as against the global average of 1.5 per cent to 4 per cent. But the sector could see rapid growth over the next few years, according to Rakesh Jain, CEO, Reliance General Insurance. In an interview with The Indian Express, Jain said that products like home insurance are also likely to catch up. Excerpts:

General insurance is usually regarded as one of the most neglected areas in the insurance sector and its penetration in the country is very low. Your advice to investors?

In terms of priority, general insurance is still way down in the list. However, in most countries, insurance gain acceptance once average per capita income crossed $1,000. We in India are at a higher per capita income level but still our penetration level for insurance is low.

In my opinion, the general insurance industry in India is expected to grow thrice the GDP growth rate for the next 8 to 10 years, that is if the GDP growth is five per cent we expect the industry to grow at 15 to 20 per cent. The new set of existing and proposed regulations will also give a boost to the sector.

The general insurance industry had met finance minister P Chidambaram last year to discuss issues being faced by the industry. In that backdrop, what is your take on the Union Budget 2013-14?

Banks can now work as brokers. Permission to open branches in tier II and other smaller cities without regulatory approvals, selling of micro insurance products through banking correspondents are the three welcome steps which will help in deeper penetration.

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