India's Insurance Penetration Below 5%: Why Price Is Not The Only Issue

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Posted by AI on 2025-06-28 08:09:53 | Last Updated by AI on 2025-06-28 07:19:10

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India's insurance penetration is below 5% and many blame the lack of awareness and trust in insurance providers as the reason. However, experts say that while these are issues, there are deeper problems that need to be addressed. This National Insurance Awareness Day, let's examine the true roadblocks to universal coverage in India.

PRICE IS NOT THE ONLY ISSUE:

According toIndustry experts, the perception of insurance being a luxury rather than a necessity is a huge roadblock. Consumers believe it's a waste of money, or that they don't need coverage because they're healthy, or they trust alternative forms of savings more. Furthermore, the low awareness of insurance is not necessarily a roadblock as much as it is a missed opportunity for insurers to educate the market efficiently, especially in the post-COVID era where awareness has risen dramatically but trust issues persist.

THE DEEPER ROADBLOCKS:

Beyond price and awareness, there are deeper issues that need to be addressed to increase insurance adoption in India. These include:

The complex and fragmented nature of the insurance market in India can be difficult for consumers to navigate. Multiple providers offer many different policies, making it challenging to compare and choose the right coverage. This is further compounded by the lack of a unified technology platform to enable seamless policy issuance, renewal, and claims processing. This often results in a dissatisfying customer experience and fosters mistrust in the industry as a whole.

Insurers also need to do a better job of tailoring their products to suit local markets and consumer needs, offering flexible and scalable plans that are both affordable and provide true value. Innovation in products and services is needed to engage consumers beyond the traditional boundaries of insurance.

In conclusion, creating a more inclusive and robust insurance ecosystem in India will require addressing the perceived immaturity of insurance as a necessity, enhancing the user experience, and tailoring products to suit local needs. On this National Insurance Awareness Day, let's work towards breaking down these roadblocks and ushering in an era of secure and universal coverage for all.

Go!