Insurance penetration remains low despite growth in real estate sector, says expert
He was speaking at a fireside chat titled ‘Beyond bricks & mortar: why risk protection is critical to modern infrastructure’
Insurance penetration in India remains low despite the rapid growth of the real estate sector, according to V.N. Sandeep, Deputy General Manager of United India Insurance Company Limited. Speaking at a session in Chennai, Mr. Sandeep highlighted that general insurance penetration is only 1%, while life insurance is at just 2.7%. He pointed out that awareness of home insurance remains low, despite insurance being more prevalent in urban areas for large projects and infrastructure developments.
The main challenge for United India Insurance, headquartered in Chennai, is creating awareness among the general public, Mr. Sandeep said. The company offers over 200 retail and commercial insurance products, including home, cyber, health, event, and wedding insurance. To expand its reach, United India Insurance is utilizing micro-offices, insurance agents, and brokers.
Mr. Sandeep made a distinction between insurance and e-commerce purchases, stating that insurance should not be bought like products on Amazon or Flipkart. He emphasized that insurance is based on trust, urging buyers to consider a company's experience, claim settlement capacity, and claim settlement ratio. United India Insurance publishes a claim settlement ratio of 95% each year.
Climate risks pose a significant challenge for property insurance, Mr. Sandeep noted. Conventional property insurance covers "Act of God" perils such as earthquakes, floods, landslides, inundation, and lightning. United India Insurance has also introduced parametric insurance, where payouts are linked to predefined weather parameters rather than physical damage. If the parameter is breached, the policyholder receives the money.
Premium calculations depend on construction materials, building design, and risk mitigation measures like fire protection systems. Mr. Sandeep advised developers to assess risks before starting projects and obtain adequate insurance coverage. For construction projects, he recommended Contractors All Risk (CAR) policies for general construction and Erection All Risk (EAR) policies for industrial projects involving plant and machinery.
Mr. Sandeep described insurance as "one of the options or best options for risk management," highlighting its role as "financial risk transfer."
Written by urgent.news from The Hindu's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
