India continues to be one of the most underinsured nations in the world, with the country having an insurance gap of roughly $27 billion or Rs.1.98 lakh crore. This is as per a survey conducted by Llyod’s.
According to Llyod’s Underinsurance Report of 2018, assets valued at $163 billion are underinsured globally, with a number of developing nations having an insurance penetration less than 1 per cent of their GDP.
India’s insurance penetration, with respect to its GDP stands at 0.9 per cent. The report also listed nations like Indonesia, Bangladesh, Vietnam, and Philippines as some of the countries which are at risk of natural disasters. These countries could find it hard to fund recovery projects in the case of any natural calamity.
In terms of absolute value, India is second to China when it comes to the insurance gap. China has an insurance gap of $76.4 billion. Other nations with a sizeable insurance gap include Indonesia ($14.6 billion), Turkey ($6.7 billion), Mexico ($6.1 billion), and Bangladesh ($5.5 billion).
Insurance gap is essentially the difference between the actual sum assured needed and the sum assured chosen. Underinsurance is a result of people not choosing adequate cover for themselves.
Compared to 2012, the underinsurance gap has decreased by 3 per cent. The underinsurance gap in 2012 was $168 billion.
Sources: Moneycontrol, Financial Express
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