Insurance products should be simple: Chidambaram

Bangalore: Noting that India is among the under-insured countries, Finance Minister P Chidambaram today said insurance products should be simple and need to reach the rural population where penetration is low.

He was speaking after inaugurating the Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd, a partnership between two of largest nationalised banks and the Asian Insurance arm of the world's largest banking and financial service group.

Applauding the partnership between the three giants— Canara Bank, Oriental Bank of Commerce (OBC) and HSBC Insurance Asia Pacific Holding Ltd— he said the the new firm was the 19th life insurance firm to be launched in India and that there were "six more in the wings."

The growing numbers indicate that India had the capacity to support such a large number of companies and that there existed an "unmet demand" for insurance products in India, he said.

Observing that the insurance penetration in India had been low, he said India was among the under-insured countries. He said insurance products also needed to reach the rural population where penetration was low.

However, as a measure of caution and advice, he said "products should be simple." "Plain vanilla is still the best flavour for an ice-cream," he said quoting an analogy. "People in India are simple folks, who work hard and save. "I believe that simpler the product, better will be the reception.

Source: PTI