PM’s Principal Secretary pitches for diverse insurance solutions
Dr PK Mishra, Principal Secretary to Prime Minister Narendra Modi, has suggested diverse insurance solutions as a sustainable cover for an ever-expanding group at affordable rates, while maintaining a growing and viable risk pool.
Addressing a National Disaster Management Authority’s (NDMA) Workshop, Dr Mishra expressed concern over an increase in the frequency and intensity of disasters globally, including in India, and advocated a strategic vision for expanding insurance coverage across diverse sectors and entities. The Workshop on “Why Disaster Risk Insurance Matters – Key Concepts and Benefits” took place on Friday.
At the same time, the Principal Secretary to the PM underscored the need for a robust actuarial expertise and a well-defined legal framework. At the workshop, Dr Mishra talked about the challenge to ensure that insurance is not only available but also accessible to the most vulnerable section of the society.
In this context, he said that government’s role in expansion of insurance becomes important and highlighted two notable similar programmes of the Modi regime, Pradhan Mantri Fasal Bima Yojana which focusses on agriculture sector and Ayushman Bharat which provides health insurance coverage to economically disadvantaged individuals.
Range of stakeholders
Dr Mishra recommended to explore the introduction of large-scale disaster risk insurance to address the significant protection gap in this under-insured area. He emphasised that, this would involve designing differentiated insurance products and services for a range of stakeholders, including households, small businesses, utilities, infrastructure services, and various levels of government – local, State, and Central.
Underlining key challenge which lies in ensuring the financial viability of these mechanisms, Dr Mishra insisted that the success of any insurance model depends on effectively distributing risks. He said that not only it is vital to ensure that those who pay premiums see it as a sensible and cost-effective way to transfer their risks; but also, those responsible for pay-outs have access to a sufficiently large risk pool to maintain financial viability.
He strongly stressed that globally, the development of diversified insurance products for disaster risks is gaining momentum. In this endeavour, he further added that, NDMA and Department of Financial Services’ (DoFS) diverse outreach to global and domestic, private and public institutions in order to gain deeper insights into these financial structures will surely assist in building a robust disaster insurance market in India.