The Indian Risk Appetite
05 Nov 2018 by Ashwini Kumar
It took the turn of the Century for the Indian subconscious to rekindle its business appetite which had helped them lead the world trade from 800 AD to 1300 AD. The spate of startups declared to the world that every Indian is born with a fire in his belly with great risk taking ability. Probably the same risk appetite keeps the average Indian believe that nothing bad can happen.
What else can explain the fact that only one out of 5 Indians have insured their life, with a quarter who have done it with adequate cover. The ever optimistic Indian, living in a city with 20 lacs of population experiencing 2000 early deaths annually, believes it can only happen to others. Maybe sometimes it is difficult to see beyond one’s life. Only if one can visualize the fate of the dependents and their financial status and the pain it can bring will change the view. It is not very difficult, with little assistance to understand how much one needs to insure to secure their family. Securing the family may cost less than the money spent on smartphones today. It may be more important decision to make than the decisions made to run the business to success.
Apart from business the highest investment made by most Indians is in their households. From swank furniture, to ultra-modern gadgets and appliances take years to build. While there had been floods, and there have been fires destroying homes and contents, less than 1 out of 100 Indians insure their households. Irrespective of the fact that most homes can be insured for a year for less than the money spent on a weekend recreation.
Knowing that all other risks which can impede one’s progress have been mitigated, can act like wind beneath the wings of the enterprising Indian. One needs to take early steps to find the right solutions to experience the freedom from unknown.
Company Managers buy insurance regularly and are well educated on how to optimize purchases. Purchase of insurance products is often focused on products which can provide immediate salvation, read “claims”.
Many insurers offer a professional indemnity (PI) policies. Corporates often assume that buying from a reputed insurer ensures the best product. One should know that an Insurers restrict their risk, even if it fetches a lower premium.