Public-sector banks (PSBs) have failed to meet the annual enrollment targets for two key social security insurance schemes, Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), as per government data reviewed by Business Standard.
As of October 2024-25, PSBs have only achieved 40% of their PMSBY enrollment target of 64 million and 30% of the 41 million target for the PMJJBY.
Launched in 2015, the PMSBY is a one-year accidental insurance scheme, renewable annually, that provides coverage for death or disability to individuals aged 18-70 who have a bank or post-office account.
The scheme offers accidental death and disability coverage of Rs 2 lakh (Rs 1 lakh for partial disability) for an annual premium of Rs 20.
The premium is automatically deducted each year from the subscriber’s bank account, based on a one-time authorization from the account holder.
Among the public-sector banks, Bank of India has the lowest performance, reaching just 11% of its target, followed by UCO Bank at 14%, Bank of Maharashtra at 24%, and Union Bank of India, also at 24%.
State Bank of India (SBI) and Indian Bank have the highest enrollment rates, with 60% and 45% of their targets achieved, respectively.
The PMJJBY, also launched in 2015, is a life insurance scheme that provides coverage for death due to any cause for individuals aged 18-50 with a bank or post-office account. Those who enroll before turning 50 can continue to receive coverage until the age of 55 by paying an annual premium of Rs 436 for a life cover of Rs 2 lakh.
Among the public-sector banks, UCO Bank has the lowest enrollment rate at 10%, followed by Bank of India at 13%, Union Bank of India at 16%, and Punjab National Bank at 19%.
State Bank of India (SBI) and Indian Bank have the highest enrollment percentages, achieving 45% and 39%, respectively.
The uptake of insurance schemes is influenced by casualties, with most beneficiaries being Jan Dhan account holders. We are gradually gaining momentum, but there is also a growing competition from private companies in the insurance market. Nonetheless, PSBs are working to scale up coverage through increased public awareness,” said a senior public-sector banker.
As per the Insurance Regulatory and Development Authority of India’s Annual Report for 2022-23, life insurance penetration decreased from 3.2% in 2021-22 to 3% in 2022-23, while the penetration of non-life insurance remained unchanged at 1% for both years.
The country’s insurance penetration dropped to 4% in 2022-23, down from 4.2% in 2021-22. On a global scale, insurance penetration and density were 2.8% and $354 for the life insurance segment, and 4% and $499 for the non-life segment. Overall, global insurance penetration and density stood at 6.8% and $853, respectively, in 2022.
Insurance penetration is defined as the percentage of total insurance premiums, while insurance density is the ratio of premiums to the population, or the per capita premium.