Question

How to increse insurance penetration in life insurance in developing country

Answer 1

The Insurance penetration in life insurance can be increased through the following ways in developing countries -

1.Public Awareness

Knowledge on this industry is scanty. The customers should be made aware that unpleasant eventualities such as accidents can adversely affect families.

2.Diversification

There should be diversification of product portfolio, while educating the citizens on the need and relevance of investing in insurance cover.

3.Regulation of Monopoly

Many developing countries consider financial institutions that are locally incorporated or even state-owned monopolies an essential element of their economic and political independence. This cross-sectional study of developing countries presents some empirical tests of the relationship between financial development and the development of the life insurance sector and provides empirical evidence of the negative effect of a monopolistic market on life insurance growth. So, the government should regulate monopoly.