RAS question
India's current insurance penetration stands at approximately what percentage, compared to the global average of 7%?
Correct answer: (B) 4%.
India's insurance penetration is approximately 4%, below the global average of 7%.
Explanation
India's insurance penetration is best read as approximately 4% because the PIB release on the Economic Survey 2024-25 gives the overall insurance penetration rate as 3.7%, while noting that the global average is 7%. The point of the question is not premium growth alone, but the coverage gap: even with total insurance premiums growing by 7.7% in FY24 to Rs 11.2 lakh crore, penetration remains well below the global benchmark. That gap explains the policy emphasis on expanding coverage towards the Insurance for All by 2047 goal through Sabka Bima Sabki Raksha Act, 2025.
Why the other options are wrong
- (A) 2% understates India's penetration because the PIB-backed Economic Survey figure is 3.7%, which rounds much closer to 4%.
- (C) 6% is too high because India's penetration is 3.7%, still clearly below the 7% global average.
- (D) 5.5% narrows the coverage gap more than the official figure allows, since the figure is 3.7%, not above 5%.
Concept
This tests financial-sector indicators, especially insurance penetration as a measure of coverage in the economy. It recurs in RAS because Economic Survey data often links sector performance with inclusion gaps and policy targets.