Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 4.0
Article rating: 5.0
Article rating: 3.3
Article rating: 5.0
RSS

News

India has second highest insurance gap of $27 bn: Report

Author: PTI/Wednesday, October 24, 2018/Categories: Insurance

India has second highest insurance gap of $27 bn: Report

Mumbai - India has the second largest insurance gap in the world of USD 27 billion (in absolute terms) after China, where the underinsurance or insurance gap is over USD 76 billion, a report said.

According to a Lloyd's of London's report, global underinsurance stands at USD 162.5 billion in 2018.

Underinsurance is the gap between the level of insurance in place to cover global risks and the actual cost to businesses and governments of rebuilding and recovering from major catastrophes.

This report also includes all the latest non-life underinsurance and insurance penetration data for natural catastrophes for 43 countries across the globe.

According to the global underinsurance report, despite the general global economic growth in recent years, the insurance gap is hardly closing. The global underinsurance gap is now USD 162.5 billion, which is down only over 3 per cent since 2012 when it stood at USD 168 billion.

The report notes that emerging countries are the least insured, accounting for USD 160 billion or 96 per cent of the total global insurance protection gap. In absolute terms, the gap identified is USD 160 billion for the emerging nations, and just USD 2.5 billion in developed countries.

Bangladesh leads the developing nations, which have the biggest gap, in terms of under penetration, followed by India, Vietnam, the Philippines, Indonesia, Egypt and Nigeria, each of which have an insurance penetration rate of less than 1 per cent.

Bangladesh, which has the highest expected annual loss from natural disasters, is the most underinsured country and also the largest insurance gap relative to GDP at 2.1 per cent, followed by Indonesia at 1.4 per cent of GDP, and The Philippines at 1.3 per cent.

The 10 least insured countries are the same as those in 2012, when Lloyd's launched its first underinsurance report, despite the fact these countries' risk profile, as a proportion of GDP, has hardly changed.

Japan, Russia, the United Arab Emirates and Sweden - have been identified as being underinsured since 2012.

Insurance levels are highest in real estate with an industrial insurance penetration rate of 0.74 per cent. This is followed by transportation and storage (0.60 per cent) and agriculture, forestry and fishing (0.60 per cent each). The lowest insurance levels are in the manufacturing sector at just 0.17 per cent, according to the report.

Since 2012, several countries have slipped into becoming underinsured, including Japan (0.04 per cent of GDP), Russia, the UAE and Sweden (all 0.1 per cent of GDP each).

Insurance penetration has also dropped slightly from 1.9 per cent to 1.8, not because people are not buying insurance but low insurance penetration is relative to GDP, the report said.

Expressed in absolute US dollar values, China has an insurance gap of USD 76.4 billion, or 0.6 per cent of GDP. Between 2004 and 2017, around 98 per cent of losses resulting from natural catastrophes were not covered by any type of insurance in China. This is slightly lower than the 99 per cent in 2012, indicating China's insurance gap could be narrowing, albeit slowly, it said.

The second and third in the list of absolute costs are India at USD 27 billion and Indonesia at USD 14.6 billion. These are the seventh and 17th largest economies in the world according to the IMF, but both have relatively young insurance marketplaces.

India suffers, as Bangladesh does, from flooding and earthquakes in the North around the Himalayas, but with a far more developed economy, it has significantly more GDP potentially at risk in absolute terms, the report said.

Print Rate this article:
No rating

Number of views (159)/Comments (0)

rajyashree guha

PTI

Other posts by PTI
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free