Here's How the Budget 2019 Will Affect the Insurance Sector

The ever flourishing and competitive insurance sector is one of the areas that seem to benefit from the budget of 2019-20 that finance minister of India, Arun Jaitley, presented on the floor of Indian parliament on February 1, 2019. The interim budget seems promising for companies selling different types of life insurance policies. With the government favouring policies, the life insurance sector to witness high growth in the financial year. Not only is this, but also equally impressive is the fact that the companies who are in this sector will get more opportunities to expand and make higher profits than the financial year gone by.

The government has taken initiatives to provide some great breathing space to the agriculture sector wherein a massive amount of INR 200 crore is allocated to develop agricultural markets as well as increase the minimum support price of all crops to at least 1.5 times the product cost. This is not all as the government has allocated a good amount of budget for the rural infrastructure that includes, but merely not confined to, building toilets, houses, roads, and electrification of villages. This brings in a huge opportunity for life insurance policy selling companies and prospects to grow.

To top it all, the government has approved Bharatmala Pariyojana to connect backward and interior areas as well as borders of the country to the mainstream by developing more than 35,000 km of road, which is a good opportunity for the insurance sector. The whole project is worth a whopping Rs.5,35,000 crore. To top it all, the steps are also taken to expand and connect airports and helipads remaining unconnected in the present state. The expansion in the infrastructure will enable more domestic and international travellers to visit the areas that remain unexplored. This simply means a big business opportunity for companies to come up with the best life insurance policies in India.

Keeping this thing in mind, it won’t be an exaggeration to say that the financial year 2019-20 is going to be promising for the insurance sector and there are more ways than one that companies dealing in this sector can find business opportunities. The hope for a better financial year also remains in the fact that insurance penetration is expected to grow with government initiatives and propitious policies. The chances of growth also remain high owing to the abysmally low insurance penetration of 2.72 percent for life insurance and merely 0.77 percent for non-life insurance in India in 2016.  

As far as the insurance sector as a whole is concerned, the interim budget for this financial year is a landmark. The government has announced health as well as life insurance plans to cover the poor and less privileged sections of the society. The government has announced the National Health Protection Scheme, which is the world’s largest government-funded healthcare scheme. On the other hand, Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are aimed to provide health and life insurance cover to marginalized sections of the society.

Summary:

The interim budget for 2019-20 is propitious and is aimed at not only increasing the insurance penetration in India but also cover the poor, marginalized and underprivileged sections of the society, which wasn’t the focus earlier.