Insurance sales from non-metro cities grow 50-60%

The awareness around insurance is not just an urban phenomenon. The insurance sales – of life and health – in non-metro cities have increased post-Covid-19 as people realise the need for term insurance coverage and accept the fact that the hospitalisation due to Covid-19 is quite a possibility.

“Contribution from non-metro cities as a percentage of its total sales has increased by 50% in the health insurance business in the year of 2020-21. Likewise, the contribution from non-metro in term insurance category has seen an even higher jump of 60% in 2020-21, most likely due to the fact that pre-issuance medical check-ups are widely available in smaller towns now,” a report by PolicyX.com shows.

The trend is encouraging as insurance penetration in India is abysmally low at 3.76% as of 2019, the FY20 Annual Report by the Insurance Regulatory Authority of India (IRDAI) shows. It was at 5.20% in 2009.

The rise in Covid-claims especially during the second wave has triggered the trend in non-metro cities. According to Sanjay Datta, Chief Underwriting & Claim at ICICI Lombard General Insurance, the company witnessed a significant jump in health insurance claims from non-metro cities in the second wave of Covid-19 compared to the first wave.

PolicyX.com report further adds that cities such as Lucknow, Jaipur, Indore, Nagpur, Ranchi, Raipur, Mysore and a few more accounted for 2x growth in insurance sales in the term insurance and health insurance categories.

“In these markets, all age groups of the audience have demonstrated a greater trust in the online insurance purchase, 36-45 years of the male audience has been highly active in the online insurance buying,” says Naval Goel, Founder & CEO, PolicyX.com.

Digital adoption is helping in better insurance penetration across India. “Insurance sales market has seen a huge shift towards the digital adoption of the products. There has been growing demand for insurance in both metro and non-metro cities. However, the adoption has been higher in the metro cities, although a palpable increase in awareness level can be seen in smaller cities, which was always missing,” says Yashendra Sharma Sr. Vice President – Employee Benefit at Alliance Insurance Brokers.

Sharma adds that the insurance companies have widened the distribution channel for better reach across metro and non-metro cities.

Will the trend continue? The digital adoption – at the underwriting and the services front – will ensure a better penetration across India.

“The shift is ought to take place because gone are the days when agents used to sell insurance plans and educate customers about merely few plans. But with the 24×7 internet exposure, the smaller market customer is well aware of the insurance products and their benefits,” says Goel.

“The wide range of plans available and the convenience provided to the customers via online AI analysis and offline insurance support has attracted the smaller markets audience to trust the online insurance purchase platform s,” he adds.