Criticism vs. Reality: Unveiling the True Impact of Insurance

In light of ongoing media criticisms, Mr. Tapan Singhel, Chairman of the General Insurance Council and MD & CEO of Bajaj Allianz General Insurance, presents a more nuanced perspective on the insurance industry’s role. Despite the negative spotlight, the industry has delivered substantial benefits, with the General Insurance sector settling claims worth ₹1.72 lakh crore in the past year, including ₹80,000 crore towards health insurance. The industry maintains an impressive claim settlement ratio of over 80%, with rejected claims often stemming from fraud or non-admissibility.

The true value of insurance becomes clear when considering its societal impact. Without it, the financial burden of medical expenses would push millions into poverty, particularly with health costs currently accounting for 60% of out-of-pocket spending in India. The motor industry would also face severe economic instability, as the ₹55,000 crore paid out in accident claims would be eliminated, potentially collapsing the sector.

Additionally, schemes like Ayushman Bharat, which provides ₹5 lakh health coverage to 55 crore beneficiaries, rely on insurance partnerships. The absence of such coverage would shift the financial burden entirely to the government, undermining national resources. Furthermore, the insurance industry aids recovery after natural disasters, agricultural losses, and more, fostering economic resilience.

Despite misconceptions about profitability, insurers face operational losses, with claims exceeding premiums. The industry also confronts significant fraudulent activity, undermining trust and driving up costs. With insurance penetration at just 1%, constructive dialogue is essential for expanding coverage and fostering societal progress.

In conclusion, while the insurance industry has room for improvement, its role as a critical safety net for millions is undeniable. Rather than focusing solely on its flaws, a more balanced approach will ensure its continued evolution and service to the public.