Govt-owned insurers opened 3,101 offices in rural and semi-urban areas: FM

Finance Minister P Chidambaram, in his interim Budget on Monday, said the country’s four public sector general insurance companies — New India Assurance Company, United India Insurance Company, Oriental Insurance Company, and National Insurance Company — had opened 1,849 offices in towns with population of 10,000 or more to serve peri-urban and rural areas.

He also said the Life Insurance Corporation of India (LIC) had opened 1,252 offices in towns with a population of 10,000 in similar areas.

“The public-sector general insurance companies are moving steadily to achieve the goals set for them,” he said while presenting the interim Budget in the Lok Sabha on Monday.

Companies such as the New India Assurance are looking to have 1,000 micro offices by the end of this year. These micro offices will have very few personnel and will look into selling policies and renewals in smaller towns, Chidambaram said.



In a meeting with LIC in May 2013, the finance minister had asked the country’s largest insurer to open 1,800 new offices in FY14. These offices would have to cover all the towns with a population of more than 10,000. LIC has to achieve a total target of 3,867 offices this year, the finance ministry had said earlier.

In his Budget speech in 2013, Chidambaram had asked LIC and public sector general insurers to be present in all towns with a population of 10,000 or more. All such areas were supposed to have an LIC and a public general insurance company office by the end of the current financial year.

This decision was taken to boost insurance penetration in rural areas. Insurance penetration, measured as a percentage of the gross domestic product, is less than five per cent in life insurance and less than one per cent in general insurance.