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Per the IRDA brochure, insurance penetration is measured as:
A{'text': 'Total assets to GDP', 'letter': 'A'}
B{'text': 'Insurance premium to GDP, expressed as a percentage', 'letter': 'B'}
C{'text': 'Number of policyholders per 1000 population', 'letter': 'C'}
D{'text': 'Net profit to premium', 'letter': 'D'}
Answer & Solution
Correct answer: B. {'text': 'Insurance premium to GDP, expressed as a percentage', 'letter': 'B'}
1. Insurance penetration is one of two measures of how developed an insurance market is.
2. The brochure defines penetration in terms of premium to GDP.
3. Insurance penetration is measured as a percentage of insurance premium to GDP.
_Source: IRDA Brochure (irdai.gov.in — official IRDAI publication) — "While insurance penetration is measured as a percentage of insurance premium to GDP, insurance density is calculated as a ratio of premium to population (per capita premium)."_
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