The government on May 31, 2022, raised the premium for its flagship insurance schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) in order to make them economically viable. A report in the Economic Times highlighted a rise in the premium rate of PMJJBY to ₹1.25 per day, translating into an increase from ₹330 to ₹436 every year.
The annual premium for PMSBY has been hiked from ₹12 to ₹20, an official statement said. The new premium rates are effective from June 1, 2022. In percentage terms, the premium increase is 32 per cent in the case of PMJJBY and 67 per cent for PMSBY. The decision has been taken in view of the long-standing adverse claims experience of the schemes, it added.
The number of active subscribers enrolled under PMJJBY and PMSBY as on March 31, 2022, were 6.4 crore and 22 crores, respectively. Since the launch of the PMSBY, ₹1,134 crore has been collected by the implementing insurers towards premium and claims of ₹2,513 crore have been paid as on March 31, 2022.
Further, an amount of ₹9,737 crore has been collected by the implementing insurers towards premium and claims of ₹14,144 crore have been paid under PMJJBY as on March 31, 2022. Claims under both schemes have been deposited into the bank accounts of the beneficiaries through the direct benefit transfer (DBT) route.
“However, no revision of premium rates was made in the last seven years since the inception of the schemes in spite of recurring losses to the insurers,” it said.
Upon examination of the claims experience of the schemes, it said, IRDAI informed that while the claims ratio (percentage of the claim amounts paid to the premium earned) pertaining to PMJJBY and PMSBY, for the period up to March 31, 2022, was 145.24 per cent and 221.61 per cent respectively, the combined ratio (sum of claims ratio and expense ratios) pertaining to PMJJBY and PMSBY for the period stood at 163.98 per cent and 254.71 per cent.
Revised rates would also encourage other private insurers to come on board for implementing the schemes, thereby increasing the saturation of the schemes among the eligible target population, especially those who are underserved or unserved.
