In a bid to further the government’s financial inclusion agenda and deepen insurance penetration in the country, Public Sector Undertaking (PSU) banks have set a target for the sale of flagship government insurance schemes in the financial year 2023-24.
The flagship insurance schemes include the Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), and Atal Pension Yojana (APY), all of which have been launched by the government in recent years.
Under the PMSBY scheme, individuals between the ages of 18 and 70 are eligible for a cover of up to Rs. 2 lakh in case of accidental death or disability, at a premium of just Rs. 12 per annum. Similarly, under the PMJJBY scheme, individuals between the ages of 18 and 50 are eligible for a life insurance cover of Rs. 2 lakh at a premium of just Rs. 330 per annum.
The Atal Pension Yojana, on the other hand, is a pension scheme aimed at providing a regular income to individuals in the unorganized sector. Under the scheme, individuals can contribute towards a pension plan, which will provide a fixed monthly pension after the age of 60.
Speaking to the media, a senior official from a PSU bank said, “We have set a target to sell at least 1 crore policies under the PMSBY and PMJJBY schemes, and to enroll at least 50 lakh individuals under the APY scheme in the financial year 2023-24.”
The official added that the bank has put in place a comprehensive plan to achieve these targets, including the deployment of dedicated teams of sales agents and the use of digital channels to reach out to potential customers.
Other PSU banks have also reportedly set similar targets for the sale of government insurance schemes, as part of their efforts to increase their fee-based income and deepen their engagement with customers.
Experts have welcomed the move, noting that the government insurance schemes have played an important role in promoting financial inclusion and providing social security to vulnerable sections of society.
“The government insurance schemes have been successful in promoting financial inclusion and providing a safety net to individuals in case of unforeseen events. The PSU banks have an important role to play in ensuring the success of these schemes, by effectively marketing them and reaching out to potential customers,” said Sanjiv Bajaj, Chairman and Managing Director of Bajaj Finserv, a leading financial services company.
Bajaj added that the government should continue to focus on expanding the coverage and benefits of the insurance schemes, in order to further strengthen the social safety net in the country. He added that the government should also seek to leverage technology and foster innovation to reach deeper into rural areas, in order to ensure that every Indian has access to adequate protection. He concluded by saying that insurance can play an important role in creating financial security for all citizens of India, and the companies must work together with the government to make this happen.
The move by PSU banks to focus on the sale of government insurance schemes comes at a time when the insurance sector in India is experiencing rapid growth, driven by rising income levels, increasing awareness of the importance of insurance, and the digitalization of the insurance process.
According to data from the Insurance Regulatory and Development Authority of India (IRDAI), the total premium income of the life insurance industry in India increased by 15% to Rs. 2.42 lakh crore in the financial year 2020-21, while the general insurance industry saw a 3.3% growth in premium income to Rs. 1.96 lakh crore.
The digitalization of the insurance process has also played a key role in expanding insurance penetration in the country, by making it easier for individuals to purchase and manage insurance policies.
Several insurance companies and fintech startups have launched digital platforms and mobile applications in recent years, which allow individuals to purchase insurance policies, make claims, and manage their policies through their mobile phones.
