Letter to BS: A lot needs to be done in India's insurance sector

Apropos your front page report “BS Insurance Round Table: 18% GST on premium is brutal, says Irdai member” (March 8). One must salute the Insurance Regulatory and Development Authority of India (IRDAI) member Nilesh Sathe for his blunt, forthright no holds barred comments on the “brutal 18 per cent GST on insurance premium”.

He is spot on when he says that India accounts for a pathetic 1.5 per cent of the world’s total insurance premium. For a country that accounts for over 15 per cent of the world population — and aspires to be a super power — this makes us a grossly under-insured nation and consequently, a nation that just doesn’t have adequate internal savings to fund its ambitious infrastructure development plans. Insurance funds worldwide support infrastructure building and so should they in India.

There is immense headroom in the sector and the increasing cost of health care demands that more and more people have adequate insurance cover. That health premium has grown at a robust 25 per cent year-on-year over the last five years is proof that the sector offers huge scope for expansion. Increased life expectancy may not be entirely due to health insurance awareness and yet it is a fact that we need much greater insurance penetration in the country.

Clearly a lot needs to be done — besides exempting premium from GST or at least taxing it at a very low rate — in our insurance sector.

Krishan Kalra, Gurugram

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