September 3, 2010 5:22 AM EDT
Union Finance Minister, Pranab Mukherjee stressed on the need of popularizing Microinsurance for achieving financial inclusion in the country while addressing a gathering at the Global Insurance Summit organized by ASSOCHAM in Mumbai on Wednesday.
Identifying financial inclusion as one of the biggest challenges for the Indian insurance market, he said, “One of the important challenges before the insurance industry today is to generate the required level of awareness about the benefits of insurance to our people particularly living in semi-urban and rural areas.”
Acknowledging the fact that insurance companies are now increasingly tapping the semi-urban and rural areas to spread the message of protection of life and property through insurance cover, Mr. Mukherjee said, “One of the main objectives of promoting financial inclusion packages is to economically empower those sections of society which are otherwise denied access to financial services, by providing banking and credit services thereby focusing on bridging the rural credit gap.”
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He further stressed that lack of protective elements may not serve the objective of promoting financial inclusion packages as the targeted section may fall back into the clutches of poverty in the event of unforeseen contingencies. Hence, to provide a hedge against these unforeseen risks, popularization of micro insurance is one of the essential ingredients of financial inclusion package.
Drawing attention to the miniscule population of India which is covered under health insurance, the Finance Minister asked the insurers to ensure further penetration of the health insurance in this country with a simultaneous consideration that the premiums are affordable for the insured.
“There is immense need of disaster management in controlling catastrophic risk in India. The insurance industry should prepare to deal with any kind of catastrophic losses. The insurance companies should concentrate on exploring the world reinsurance market, so that the impact of heavy losses can be mitigated”, he added.
(Disclaimer: By arrangement with Microfinance Focus. All copy rights reserved by Microfinance Focus. International Business Times is not responsible for any omissions or commissions in the article.)
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