Marsh India expects growth of 20-25% in next year, says Sanjay Kedia

Marsh India has seen consistent growth year after year, crossed 8,000 corporate clients in India and the total amount of premium placed for the financial year ending March 2023, was Rs 15,000 Cr

Sanjay Kedia, chief executive officer (CEO) and country head, Marsh India, discusses various types of insurance products that are in demand after the pandemic, in a video interaction with Manojit Saha for The Business Standard Banking Show. Edited excerpts:

How has the performance of Marsh India been in FY23 in terms of top line growth and what would the three key drivers be?

Marsh India has seen consistent growth year after year. We crossed 8,000 corporate clients in India and the total amount of premium placed for the financial year ending March 2023 was Rs 15,000 crore. This was a growth of about 25 per cent compared to the previous year. We expect similar growth of 20-25 per cent this year as well. In terms of drivers, the biggest driver is group medical business, which the corporates buy for their employees. Post Covid, people are more conscious, making them buy higher limits. 

Which are the new areas of coverage that companies are looking at post Covid?

Covid has made a big impact on employee benefit insurance in particular. I would say corporates have become far more aware, conscious, and committed to the cause of protecting employee health and wellness. Insurance is one part, but the whole approach towards insurance and wellness has gained centre stage. So, companies are looking at this entire space more holistically. Of course, each company has its own nuances and differences in terms of strategy, but companies are looking at different ways to address the needs of different segments of their employees. To give you a sense in terms of broad trends, I would say what is common to all employees is that there is medical inflation, which continues to create premium rise. During Covid, people were working from home only and now it’s a hybrid culture in most corporations. So, you see the emergence of digital health as a very big component. Doctor consultation, various kinds of initiatives, which could be done through digital health are integrated as part of the entire solution. So, digital health is very much there. Emphasis on mental well-being is on the rise and that is a big area that has come to the forefront. We are also seeing the emergence of outpatient insurance — the number of players who have opted for this are limited but still the ask is increasing. Historically, in the Indian market, health insurance was largely hospital insurance. And now, the emergence of preventive care in the form of OPD is emerging even in the form of insurance, So, that is a very interesting trend. Another trend that we are seeing is that there is a need for more personalisation. So, the use of digital technology and the power of flexible benefit insurances are coming in a big way.

There is a spike in premiums in the group term liability policies. How much was the increase? Do you think it has reached the limit?

The rates which the Indian market used to enjoy have fundamentally altered. So, the rate which the Indian market used to enjoy on the group term life rose in the peak of Covid by almost 100 per cent. It ranges from 50 per cent to 150 per cent. There is no more rate rise for the market as a whole but it depends on a case-to-case basis. We have seen some small corrections but not a major correction. So, the rate reset has happened from pre-Covid to now at a higher level and it seems it is here to stay.

Digital banking has gone up substantially over the last few years. Do you think insurance coverage is adequate?

Given the total exposure and the business at risk, the covers are highly inadequate. But they have significantly moved from the past and are still inadequate from the size of exposure.

Insurance Regulatory and Development Authority of India (Irdai) has given flexibility to insurance companies for paying commission to brokers. Has that resulted in insurance companies paying higher commission?

In the corporate space business, where Marsh operates, we have not seen any change from what we used to see prior to this freedom. I would say the corporate side of business, both on premiums and commissions were highly competitive and we have not seen a change. I believe this is a welcome change because the Indian market is now in line with the best international practices. It is because both premium rates and commissions are left to market forces. Market forces drive efficiency and this leads to a better result for all parties, including customers.

There is hardening of reinsurance rates. What is your take?

I think this is an area of concern and it’s a global concern. I would say across all lines of business that there has been a hardening of it. It seems we are in a more risky world — not only geopolitical risk but also hurricanes and other natural catastrophes. The world has been seeing many such events, which were supposed to be one in 100 years, happening almost every year. With so many natural catastrophes and other risks, the insurance market rates have gone up mostly in the last 3-4 years. And, it seems they are here to stay.