As India envisions becoming a developed nation by 2047, the insurance sector must play its foundational role in providing financial security and dignity to every citizen says the MD & CEO of Bharti AXA Life Insurance
Parag Raja
The overarching goal set forth by the government of India, led by the Prime Minister’s office, is for our country to become a developed nation by 2047, the centenary year of our independence. Within this grand vision, all industries have taken their individual goals to align with this big picture of transformation. The insurance sector, under the leadership of the former IRDAI Chairman, Debasish Panda, had rolled out the corresponding vision that we must achieve “Insurance for All by 2047.”
What exactly does ‘Insurance for All’ mean? What we are trying to achieve is that every Indian should be protected. This means every Indian household should be covered with at least one life insurance policy. Beyond life, they should also have health insurance and property insurance. Likewise, all relevant institutions—whether they are large corporates or MSMEs—should have insurance on their products wherever it is relevant. If we cover all citizens with one life, health, and property policy, and similar coverage for entrepreneurs, that is what would help us achieve this ambitious target by 2047.
The Strategy on the Ground: Going Granular
To achieve this sector-wide objective, the IRDAI has launched many initiatives, one of which is the creation of the State Level Insurance Committee (SLIC). This initiative is modeled after the State Level Banking Committee (SLBC), which was created two decades ago. The result of the SLBC’s work is that today, nearly every individual in our country has a bank account. How did they achieve this? They went local.
The SLBC worked with state machinery, involving a lead bank, the financial services department, and the Secretary Finance in every state. They created committees at the district level (SLDCs) and then went down to the Panchayat level. We are following the exact same model in the insurance sector now with SLICs.
Every state now has a lead insurer. Bharti AXA Life, the company I represent, is proud to be the lead insurer, along with LIC, for the state of Odisha. Our role is not just to increase our own share, but to ensure that the entire 4.5 crore population of Odisha gets covered. We are now forming committees at the district level and are trying to go local to the Panchayat level.
If you look at a state like Odisha, there are over six thousand Panchayats and over sixty thousand villages. We want to go granular at each of these unit levels and cover the masses beyond the top cities. I would also like to highlight that while the all-India objective is 2047, the state of Odisha has decided to run faster, aiming to achieve Insurance for All by 2036, when Odisha is going to complete 100 years of its formation as a special province under the British rule.
The Ultimate ‘Why’: Protecting Dignity
Why is this level of coverage so critical? In many developed countries, there is a basic social security safety net; medical is free, education is free, and pension is often covered. In our country, since we are still developing, not all citizens have this level of coverage given by the government free of cost.
Therefore, by covering individuals through insurance, we are protecting them against three primary risks: living too long, dying too soon and opportunity/emergency.
At a family level, the logic is even simpler. Every household has one/two breadwinners—the persons who are working, earning, and providing the standard of living, taking care of the family’s lifestyle needs, education, marriage, and retirement. We all know of a friend or family where, all of a sudden, an unfortunate event happened to the bread earner and the entire family went back one generation.
What insurance does is basically act as a tool to provide the same quality of lifestyle and dignity to that family in case the breadwinner is not there. Insurance is a product which should be bought by anybody who has love for their family.
A Call to Action
I have been in this industry for the last 25 years, and I still meet people who have a car—the car is insured. They have a house—the house is insured. They have products and goods—they are insured. But their life is not insured. I honestly do not understand how that is possible.
My message to you is simple: wherever you buy, whoever you buy from, whichever product you buy, please have life insurance on the breadwinner’s life.
The formula is very straightforward: Whatever your income is, 10 times that income should be the life insurance cover that you buy.
This is my call to action for every earning member in the household: Buy it today, because life insurance gets expensive with every passing year, and secondly, you may not get it when you want it, because your health may not allow it. Do it today.
(Parag Raja is a veteran in Indian Insurance sector and currently serving as the Managing Director and Chief Executive Officer of Bharti AXA Life Insurance. This article is based on the transcription of his talk, he had with OdishaLIVE Media Network exclusively, on the subject recently. Views expressed as personal.)