Financial literacy and consumer education on insurance in India

The IRDA along with other stakeholders of the industry, has a responsibility of improving financial literacy in the country as well as to impart consumer education in insurance. Towards this end, IRDA has been working on and has implemented various initiatives.


In the area of financial literacy, IRDA is also working with the other financial regulators, namely, the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and Pension Fund Regulatory and Development IRDA (PFRDA) through the Financial Stability and Development Council (FSDC) platform on a common approach for the nation as a whole.

Preparation of a National Strategy on Financial Education is the first activity, which all the regulators together have taken in this direction. On the financial literacy front, one of the priority areas that IRDA is looking at and has commenced work on, is the implementation of financial literacy and insurance education through school level curriculum. Various other channels to ‘catch them young’ are also being explored in collaboration with the industry.

Ever since IRDA created an exclusive department to focus on consumer related areas, it has been working on developing a long term strategy for and implementing various initiatives to create a better awareness about insurance among prospects and policyholders.

The ground work involved preparation of an information bank in simple language, identifying and preparing messages and bits of information, and devise approaches to disseminate information including use of various media including print and broadcasting, and television channels, keeping in mind the target groups.

The activities carried out under the ‘Bima Bemisaal” logo, during the year 2011-12, included print and electronic campaigns (television and radio) in English, Hindi and other Indian languages. IRDA also partially supported six seminars during the year which were conducted by various consumer bodies on the subject of insurance. IRDA’s own annual seminars on policyholder protection and welfare were conducted on 3rd June at Delhi in 2011 and 2nd June at Kolkata in 2012.

The IRDA has brought out various publications in print and electronic mode in English, Hindi and various other languages. These include Policyholder Handbooks, a series of six volumes covering Life Insurance, Health Insurance, Motor Insurance, Travel Insurance, Property Insurance and Insurance Intermediaries, apart from the comic book series “Ranjan and his tryst with Insurance”, which has just been converted into animation films.

This educational material is being distributed to various school and other agencies to spread the message of insurance. IRDA also distributes posters with a view to educating consumers about various areas relating to insurance during the seminars, it supports.

One of the major activities undertaken during the year was finalization of IRDA’s Consumer Education Website which was launched during the annual seminar held in June, 2012 in Kolkata.

The website ( is comprehensive covering various areas of insurance and hosts the e-copies of IRDA’s publications relating to consumer education as well. The website has already crossed 2.30 lakh hits (as on 30th September, 2012). It is the IRDA’s constant endeavour to improve the website and bring in more interactive features, especially for school students. Going forward, the IRDA is looking at widening the reach of its financial literacy programme by enhancing distribution of its education material in collaboration with the various stakeholders of the industry.

The IRDA is exploring the possibilities of use of the existing network including the Financial Literacy Centres and Common Service Centres. The other option being considered is extending the scheme of partial support being given to consumer bodies to other agencies, especially those in the rural areas. Expansion of the series of Policyholder Handbooks to include other areas of relevance and interest to the policyholder is also on the cards.

Insurers are also being encouraged to carry out generic education on insurance, and considerable headway in this direction has been made by the industry. However, considering the profile of the Indian population, it will require sustained and systematic effort on the part of all stakeholders to reduce the information asymmetries that exist today between the policyholder on the one hand and the insurers on the other.

The combined efforts of the stakeholders are required if this gap is to be effectively reduced. The proposal of all financial regulators to have a common approach to improve financial literacy in the country will augment the efforts of the respective sectors – banking; capital markets; pensions and insurance in their respective areas. The IRDA is striving at making considerable progress in their area through the combined efforts of all the financial sector regulators.

Courtesy IRDA Annual Report 2011-12

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