Corona Virus Contribution…


As the world is facing the serious issue of Corona virus and most of the countries have imposed nationwide lock down, the number of cases of this pandemic seems unstoppable. The total number of cases of Covid-19 had surpassed 4.5 million and is inching towards 5 million mark. No body knows, when this will come to a halt. Total number of deaths due to Covid-19 is 313,759 (at the time of writing this article) and it may not be unprecedented if deaths increases in near future. It’s rare to see any country free from Corona virus pandemic at this point of time. United States had suffered the most, both in terms of number of cases and deaths. In fact, the total number of cases in US had surpassed 1.5 million and number of deaths had crossed 90,000 mark. Every country is working on in their capacity to have some cure in near future, including the vaccine.

Needless to say, be it small or big county (in terms of population), Covid-19 has compelled the world to “Stand-still, and India is no more exception. India, the 2nd largest country of the world (in terms of population), has been also hit badly due to this Corona virus pandemic. The country is in lock down for almost two months now and it may continue. Lock down 4.0 has been imposed as well and has been extended to 31st May, 2020. Due to large population and population density, the risk of community spread is very high in India, especially in major cities where population density is highest.  Mumbai has the largest number of cases in India and the city which never slept and stopped, came to halt. This is the case with all the major cities in India. Most of the services has stopped functioning in India except the essential services due to Covid-19. As of now, the total number of Covid-19 cases in India is over 91,000. The increase in number of cases in recent days is a matter to worry. The first case in India was reported on 30th January, 2020 from Kerala. There were 62 cases on 10th March and 1251 cases on 30th March. The current tally stands at 91,449 (at the time of writing this article). Let’s look at the number of cases and deaths in India.

Table: Total No of Corona Cases and deaths in India as on selective dates
Date Total No of Cases Total No of deaths
26th Feb 2020 3 0
10th Mar 2020 62 0
30th Mar 2020 1,251 32
10th Apr 2020 7,600 249
25th April 2020 26,283 825
1st May 2020 37,257 1,223
5th May 2020 49,400 1,693
10th May 2020 67,161 2,212
15th May 2020 85,784 2,753
16th May 2020 90,648 2,871
Source: https://www.worldometers.info/coronavirus/country/india/

Look at the above figures carefully, the number of cases and deaths have more than doubled from 1st May to 16th May 2020. There were 4,864 new cases reported on 16th May, the highest number of cases reported in a day so far. Although, India has a good recovery rate so far as compared to other countries, due to proactive lock down and other steps taken by the government. But, the above figures are matter of concern as the total number of cases in inching towards 100,000.

Testing of Covid-19 should be also taken into consideration. As of now (at the time of writing this article), there are 22,27,642 tests have been conducted. The total number of Corona cases comes out to be 4.1% of the total tests conducted. India with over 1.3 billion population, the number of tests conducted so far is not even 0.5% of the total population. Now consider the testing conducted on at least 1% of the total population which comes out to be around 1,30,00,000 and applying the same assumption, the total number of Corona cases comes out to be around 533,000 (4.1% of 1,30,00,000 = 533,000). Similarly, if the tests are conducted for at least 10% of the country’s population, you can imagine the number of cases which comes out to be over 1 million. That’s why it is a matter of concern, considering the fact, India lacks well and proper health infrastructure.

Since this is a pandemic situation and the country had suffered and may suffer serious economic loss post the Covid-19 era. But we don’t know when this will end. As most of the economic activities had stopped, the country Gross Domestic Product (GDP) will fall drastically. The International Monetary Fund (IMF) too had predicted the same. Most of the population of India works in unorganized sector and this sector has been hit the worst. Daily wages labours have no work and they are migrating to their home-town and the saddest part is, they are losing their lives. I am amazed and saddened to hear accidents are happening in this lock down situation (God knows how and why during lock down), killing innocent people.  People are dying due to hunger and accidents. Kids are crying in front of dead bodies of their parents and our so-called intellectual leaders are leaving no stone unturned to do politics on it… Sorry to say but that’s the fact…

PC: Google

There are also information coming from many companies that they are doing salary deduction due to Covid-19 situation, be it big corporates or small companies. The salary deduction ranges from 5% to 50%. This is shocking. Employees main source of income is their salary and work from home is in practice right now, then why salary deduction? It is shocking to see that some of the big names who used to give lectures on crisis management doesn’t have enough reserves to pay their employees. It may not be shocking to see high number of lay-offs and termination during or post Corona era.

The other contribution of this Covid-19 is on Stock market. Both Nifty 50 and Sensex fell. Currently, Nifty 50 is trading below 10,000 mark and it is important to note that it touched 7600 mark on 23rd March 2020. Same is the case with Sensex. Sensex is trading below 40,000 and it was trading just below 26,000 on 23rd March 2020 and currently trading just above 30,000. Nifty 50 and Sensex are the two most important stock indexes of India, traded on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) respectively.

To summarize, some of the Corona Virus contribution includes:

  • Pandemic situation across the country and world.
  • Large number of deaths.
  • Unorganized sector worst hit in India.
  • Economic activities stopped.
  • Daily wages labours and their families are badly affected.
  • Innocent deaths due to accidents and hunger.
  • Illogical politics.
  • Salary deductions.
  • Phase-wise lock down.
  • Stock market down.

It is hard time and we must unite to tackle this situation. Please share your views on what you think on the current Covid-19 situation and what according to you is the contribution of Covid-19 apart from what is mentioned above.

– Ashish Kumar

कोरोना, तांडव करो न…


दुनिया में आयी एक ऐसी महामारी |
हर जगह मच गयी त्राहि त्राहि |
मानव हो रहे बेचैन और परेशान |
एक सूख्म जीव ने कर दिया विश्व को हैरान |
खतरों से खेलने वाले आज खतरे में हैं |
लाखों लोग इस से प्रभावित हो रहे हैं |
कहते हैं इसे जग में कोरोरना |
अब और तांडव मत करो न |

PC: Google

इस महामारी का अब तक कोई तोड़ नहीं |
कितनों को ले डूबेगी पता नहीं |
अचाननक शुरू हुई जुंग कब ख़त्म होगी ?
कोरोना से राहत कब मिलेगी ?
लाशों का अम्बार लगा दिया इसने |
इटली, स्पेन, इंग्लैंड और अमेरिका में |
समझ नहीं आ रहा ये सब क्यों हुआ ?
चीन से शुरू हुआ और विश्व को बर्बाद किया |
कौन ज़िम्मेदार है इस भयावह नज़ारे की |
लाशों का ढेर है खरीददार कोई नहीं |
ज़मीन काम पर रही लाशों को दफ़नाने में |
रूहें काँप रही हैं इस खौफनाक मंज़र में |
कहते हैं इसे जग में कोरोना |
अब और तांडव मत करो न |

PC: Google

कुछ बुद्धिजीवों को इकॉनमी की पड़ी है |
लोग मर रहे हैं उनकी सुध नहीं है |
धंधे में नुक्सान की पड़ी है |
आर्थिक इस्थ्ती तो फिर से सुधर जाएगी |
इंसान बचेंगे तभी इकॉनमी रहेगी |
कालाबाज़ारी में मुनाफे की दुकान चला रहे हैं कुछ |
इंसानियत भूल कर अनाज का कत्लेआम कर रहे हैं कुछ |
लड़ाई लम्बी है और लड़ना है |
साथ मिल के इस जंग को जीतना है |
ईश्वर से यही प्राथना है …
कहते हैं इसे जग में कोरोना |
अब और तांडव मत करो न…

– Ashish Kumar

Understanding Insurance Penetration


Two of the most important and mostly used terminologies in insurance industry throughout the globe are insurance penetration and insurance density. In fact, these two are also used to compare the insurance industry of various countries and plays an important parameter for judging the insurance growth in any economy. In this post, I will discuss about Insurance penetration and will try to a make readers understand about the same and will be discussing Insurance density in a separate post.

Insurance Penetration: Technically, Insurance Penetration is the ration of premium underwritten in a particular year to the Gross Domestic Product (GDP) of the country and is expressed as a percentage. In other words, insurance penetration is the percentage contribution of the insurance sector to the GDP of the country. Let us understand with an example. Suppose the total premium underwritten in a Financial Year in a country is INR 1,00,00,000 and the GDP of the country of that Financial Year is INR 50,00,00,000. To calculate the insurance penetration, divide the premium underwritten to the GDP which means, (1,00,00,000/50,00,00,000 = 0.02) and expressing this as a percentage will come up to 2% (0.02*100 = 2). This means, the insurance penetration is 2%. Insurance Penetration is widely used and you will encounter this jargon in almost every insurance journals, reports, research papers etc.

As per the latest Insurance Regulatory and Development Authority of India (IRDAI) Annual Report 2017-18, the insurance penetration of India in 2017 was 3.69% which is a slight increase from 3.49% in 2016. Further, the insurance penetration can be segregated in to life insurance and non-life insurance. As per IRDAI Annual Report, the life insurance penetration and non-life insurance penetration of India in 2017-18 were 2.76% and 0.93% respectively.  For 2016-17, life insurance penetration and non-life insurance penetration were 2.72% and 0.72% respectively. This indicates a marginal increase in life insurance and non-life insurance penetration from 2016-17 to 2017-18. Let’s look at the insurance penetration of some of the countries which is given in the following table:

Insurance Penetration of selected countries (in %)
Country Year 2016 Year 2017
Life Non-Life Total Life Non-Life Total
Taiwan 16.65 3.34 19.99 17.89 3.42 21.32
Hong Kong 16.2 1.41 17.6 14.58 3.36 17.94
South Africa 11.52 2.74 14.27 11.02 2.74 13.75
South Korea 7.37 4.72 12.08 6.56 5 11.57
United Kingdom (UK) 7.58 2.58 10.16 7.22 2.36 9.58
France 6.06 3.17 9.23 5.77 3.18 8.95
Japan 7.15 2.37 9.51 6.26 2.34 8.59
Switzerland 4.72 4.12 8.85 4.41 4.12 8.53
Singapore 5.48 1.67 7.15 6.64 1.58 8.23
India 2.72 0.77 3.49 2.76 0.93 3.69
World 3.47 2.81 6.28 3.33 2.8 6.13
Source: Swiss Re, Sigma volumes, 3/2017and 3/2018

A closure look at the insurance penetration reveals that India is way behind the world average insurance penetration.  Taiwan is the country with highest insurance penetration of 21.32 % followed by Hong Kong and South Africa having insurance penetration of 17.94% and 13.75% respectively. Also, the above table reveals that Switzerland is the country where the gap between life and non-life insurance penetration is minimum. In fact, Switzerland has a proper distribution of life and non-life insurance business and both life and non-life insurance has almost equal contribution to the country’s GDP.

Insurance penetration is an indicator of growth of insurance sector for any economy in a particular year. It is widely used as a comparative tool to measure and compare insurance industry among various countries and hence knowing and understanding of insurance penetration is beneficial for all of us. Hope I was able to make you understand this jargon in simple terms. 🙂

Ashish Kumar