Regulator says 95% of MSMEs lack insurance

Insurance regulator IRDAI has said that only 5% of micro and small and medium-sized enterprises are insured, a situation brought into prominence by the COVID-19 pandemic.

To narrow the insurance gap, the regulator will direct insurance companies to mandatorily offer a standardised cover for this segment, reported Times of India.

A standardised product will reduce disputes in interpretation of insurance conditions and make it easier for small businesses to pick up insurance plans. I also urge all businesses to take out group health insurance policies for workers and employees,” said Mr Subhash Chandra Khuntia, IRDAI chairman. He said that such group products were necessary in the interest of workers and also to instill confidence in them at a time when they are afraid to go to the workplace.

In addition, Mr Khuntia said, β€œThe insurance industry collects about $100bn in annual premium and has $600bn of assets under management, which are available for economic development. This is going to grow phenomenally in the next few years.”

Asia Insurance Review

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