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Insurance density, as defined by IRDA, is the ratio of:
A{'text': 'Premium to GDP', 'letter': 'A'}
B{'text': 'Claims to premium', 'letter': 'B'}
C{'text': 'Premium to population (per capita premium)', 'letter': 'C'}
D{'text': 'Investments to net worth', 'letter': 'D'}
Answer & Solution
Correct answer: C. {'text': 'Premium to population (per capita premium)', 'letter': 'C'}
1. Insurance penetration and insurance density are two distinct measures.
2. Penetration uses GDP; density uses population.
3. Insurance density is calculated as a ratio of premium to population (per capita premium).
_Source: IRDA Brochure (irdai.gov.in — official IRDAI publication) — "insurance density is calculated as a ratio of premium to population (per capita premium)"_
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