Insurance penetration is measured as

Insurance penetration is measured as

the ratio of insurance premium to population
the percentage of insurance premium to GDP
the percentage of insurance premium to per capita income
the ratio of insurance premium to market capitalization
This question was previously asked in
UPSC CBI DSP LDCE – 2023
The correct answer is B.
– Insurance penetration is a measure of the level of development of the insurance sector in a country.
– It is calculated as the ratio of total insurance premium underwritten in a given year to the Gross Domestic Product (GDP) of the country in the same year, expressed as a percentage. This indicates how much of the country’s economic output is spent on insurance premiums.
Another related measure is “insurance density,” which is calculated as the ratio of total insurance premium underwritten in a given year to the total population, indicating the average spending on insurance per person.