Insurers need to look beyond national boundaries and expand their operations abroad, Sudhin Roy Chowdhury, member (life) of the Insurance Regulatory and Development Authority (Irda), said on Friday.
“If foreign companies can come to India in a big way, why can’t we expand our wings abroad? Look at (German insurer) Allianz. Around 60 per cent of their business is from markets outside Germany,” he said during his speech at a seminar organised by the Indian Chamber of Commerce.
Domestic insurers could either explore acquisition opportunities or grow businesses organically in foreign markets, he added. The Irda official’s comments come at a time when the industry and the government are debating if the limit on foreign direct investments in Indian insurance joint ventures should be increased to 49 per cent from 26 per cent. The decision is pending, as many political parties are not in favour of this move.
Industry players, however, said they were not keen to grow their businesses outside India, at least for now. “We don’t have the appetite or scale to serve customers globally,” a chief executive of a private life insurance company told Business Standard. “There are plenty of opportunities in India and we would like to focus on these.”
Insurers said insurance companies, at best, would open a few branches abroad to serve non-resident Indians.
Roy Chowdhury also said insurance companies should consider setting up ATMs, especially in unbanked centres and remote areas, for cost-effective delivery of services. The move was also likely to improve the penetration of insurance products, as ATMs would offer clients instant redemption facility.
The proposal to set up ATMs was still at a discussion stage, he clarified.
Separately, Roy Chowdhury said while insurance companies are often accused of mis-selling products, customers also try to take advantage by making false allegations against insurers.
“We will now insist customers to give a declaration that they have understood the product sold to him to avoid this situation,” he said.
He urged insurance companies to manufacture simple products and educate customers about insurance schemes to contain mis-selling.