Consider the following statements about Insurance Sector in India and identify the correct one s 1 I...........

Economic Affairs Pension and Insurance

Consider the following statements about Insurance Sector in India and identify the correct one/s.

1. Insurance penetration is defined as the ratio of premium underwritten in a given year to the total population

2. Insurance density is defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP).

Select the correct answer using codes given below

1 only

2 only

Both are correct

Neither is correct

The correct statements are:

Insurance density is defined as the ratio of premium underwritten in a given year to the gross domestic product (GDP).

Explanation:

False: Insurance penetration is not defined as the ratio of premium underwritten to the total population. Instead, insurance penetration is calculated as the ratio of the premium underwritten in a given year to the Gross Domestic Product (GDP) of the country. It provides a measure of the insurance industry's contribution to the overall economic output of the country.
True: Insurance density is indeed defined as the ratio of premium underwritten in a given year to the Gross Domestic Product (GDP) of the country. This metric helps in understanding the average expenditure on insurance per capita and provides insights into the level of insurance coverage in relation to the economic activities of the country.