New Delhi: Dr PK Mishra, Principal Secretary to Prime Minister expressed concern on an increase in the frequency and intensity of disasters globally, including in India, and said that disaster risk coverage is a must for all.
Dr Mishra was on Friday delivering a keynote address at National Disaster Management Authority's (NDMA) Workshop on “Why Disaster Risk Insurance Matters – Key Concepts and Benefits” here in Delhi.
PM Modi vision
Elaborating on the Prime Minister Narendra Modi vision and commitment to this subject, he delved on an all-inclusive ten-point agenda on Disaster Risk Reduction (DRR) in 2016.
Drawing inspiration from Prime Minister, he specifically observed that disaster risk coverage is a must for all, starting from poor households to small and medium enterprises to multi-national corporations to nation states.
Dr Mishra mentioned two notable government-backed insurance programmes, Pradhan Mantri Fasal Bima Yojana (PMFBY) and Ayushman Bharat.
PM Fasal Bima Yojana
Firstly, how can we effectively reach those segments of the population who find it difficult to purchase insurance? This raises questions of accessibility – how can we broaden insurance reach through more affordable pricing, increasing awareness, and simplifying the claims settlement process?
Dr Mishra suggested that insurance should not only available but also accessible to the most vulnerable section of people.
Secondly, what role should the government play in supporting the expansion of insurance? Should the government act as a catalyst, facilitating the growth of the insurance market, or should it take a more direct role, such as purchasing insurance for certain sectors? How should the government create public-private partnerships that improve the outreach of insurance services and products?
Ayushman Bharat
On Ayushman Bharat which provides health insurance coverage to economically disadvantaged individuals, ensuring access to quality healthcare and reducing out-of-pocket expenses, Dr Mishra said that both these initiatives are central to the government’s broader agenda of promoting social equity, financial inclusion, and household-level risk management, demonstrating the critical intersection of insurance with development goals.
Expanding insurance coverage
Dr Mishra advocated for a strategic vision for expanding insurance coverage across diverse sectors and entities. He underscored the need for a robust actuarial expertise and a well-defined legal framework.
Diverse insurance
He suggested for ‘diverse insurance solutions’, as he underlined the need for sustainability at its core – providing insurance to an ever-expanding group at afordable rates, while maintaining a growing and viable risk pool
Dr Mishra emphasized that the emerging trends highlight India's potential to innovate in its application of disaster risk insurance and join the global trend toward more resilient, efficient and inclusive insurance solutions.
Social objectives
With the aim on advancing India’s social objectives by providing risk protection to vulnerable populations, Dr Mishra said that the PMFBY focuses on the agriculture sector, offering affordable crop insurance to farmers, thereby safeguarding their income from crop losses due to natural disasters. He further added that this scheme supports farmers’ livelihoods and enhances resilience in rural areas.
Building on the success of existing programmes like Pradhan Mantri Fasal Bima Yojana and Ayushman Bharat, 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 emphasized 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.
Key challenges
Underlining key challenge which lies in ensuring the financial viability of these mechanisms, Dr Mishra emphasized 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.
Dr Mishra strongly stressed that globally the development of diversified insurance products for disaster risks is gaining momentum. In this endeavor, 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.
Dr Mishra suggested for diverse insurance solutions, as he underlined need for sustainability at its core – providing insurance to an ever-expanding group at affordable rates, while maintaining a growing and viable risk pool.
Govind Mohan, Home Secretary; Rajendra Singh, Member, National Disaster Management Authority; Safi A Rizvi, Advisor, NDMA; Rajendra Ratnoo, Executive Director, NIDM; and a number of professionals from the Insurance industry were present on the occasion.
