Prime Minister Narendra Modi’s Principal Secretary P K Mishra has stressed that globally the development of diversified insurance products for disaster risks is gaining momentum.

In this endeavour, he further added that the National Disaster Management Authority (NDMA) and Department of Financial Services’ (DoFS) diverse outreach to global and domestic, private and public institutions to gain deeper insights into these financial structures will surely assist in building a robust disaster insurance market in India.

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Addressing a National Disaster Management Authority’s (NDMA) Workshop on “Why Disaster Risk Insurance Matters – Key Concepts and Benefits” here on Friday, he suggested diverse insurance solutions, while underlining the need for sustainability at its core – providing insurance to an ever-expanding group at affordable rates and maintaining a growing and viable risk pool.

He emphasised that the emerging trends highlight India’s potential to innovate in its application of disaster risk insurance and join the global trend toward more resilient, efficient and inclusive insurance solutions.

Expressing concern about an increase in the frequency and intensity of disasters globally, including in India, Dr. Mishra advocated for a strategic vision for expanding insurance coverage across diverse sectors and entities. He also underscored the need for robust actuarial expertise and a well-defined legal framework.

In the context of these emerging trends in expanding insurance coverage, he structured his deliberation on two critical issues.

Firstly, how can we effectively reach those segments of the population who find it difficult to purchase insurance? This raises questions of accessibility – how can we broaden insurance reach through more affordable pricing, increasing awareness, and simplifying the claims settlement process?

He suggested that ensuring that insurance is not only available but also accessible to the most vulnerable is a key challenge that we must tackle.

Secondly, what role should the government play in supporting the expansion of insurance? Should the government act as a catalyst, facilitating the growth of the insurance market, or should it take a more direct role, such as purchasing insurance for certain sectors? How should the government create public-private partnerships that improve the outreach of insurance services and products? These crucial questions directly relate to the fiscal sustainability of insurance-related interventions, he added.

Elaborating on the Prime Minister’s vision and commitment to this subject, he delved into an all-inclusive ten-point agenda on Disaster Risk Reduction (DRR) in 2016. Drawing inspiration from the Prime Minister, he specifically observed that disaster risk coverage is a must for all, starting from poor households to small and medium enterprises to multi-national corporations to nation states.

He mentioned two notable government-backed insurance programmes, Pradhan Mantri Fasal Bima Yojana (PMFBY) and Ayushman Bharat.

With the aim of advancing India’s social objectives by providing risk protection to vulnerable populations, he said the PMFBY focuses on the agriculture sector, offering affordable crop insurance to farmers, thereby safeguarding their income from crop losses due to natural disasters. He further added that this scheme supports farmers’ livelihoods and enhances resilience in rural areas.

On Ayushman Bharat which provides health insurance coverage to economically disadvantaged individuals, ensuring access to quality healthcare and reducing out-of-pocket expenses, the Principal Secretary to the Prime Minister said both these initiatives are central to the government’s broader agenda of promoting social equity, financial inclusion, and household-level risk management, demonstrating the critical intersection of insurance with development goals.

Building on the success of existing programmes like Pradhan Mantri Fasal Bima Yojana and Ayushman Bharat, Dr. Mishra recommended exploring the introduction of large-scale disaster risk insurance to address the significant protection gap in this under-insured area.

He stressed that this would involve designing differentiated insurance products and services for a range of stakeholders, including households, small businesses, utilities, infrastructure services, and various levels of government – local, state, and central.

Underlining the key challenge which lies in ensuring the financial viability of these mechanisms, Dr. Mishra emphasised that the success of any insurance model depends on effectively distributing risks. He said not only it is vital to ensure that those who pay premiums see it as a sensible and cost-effective way to transfer their risks; but also, those responsible for pay-outs have access to a sufficiently large risk pool to maintain financial viability.