 "General insurers brace for climate, cyber and EV-era risks at BFSI Summit")
From cyberattacks and climate change to supply-chain disruptions, as risks evolve in complexity and scale, general insurers are being pushed to rethink their traditional playbook. No longer limited to underwriting and claims management, insurers are now taking on the role of proactive risk advisors, leveraging technology, data analytics, and innovative products to stay ahead of emerging challenges.
On Day 2 of Business Standard BFSI Insight Summit 2025 in Mumbai on Thursday, leaders from the general insurance sector discussed how the industry is adapting to this new era of risk to safeguard individuals and businesses in an increasingly unpredictable world.
The industry chiefs argued that the response must be systemic — combining product innovation, public-private cooperation, deeper data use, and customer incentives — if the sector is to contain escalating economic and social losses.
Climate shocks: capacity, layering, and public-private solutions
Tapan Singhel, MD & CEO, Bajaj General Insurance, warned that the insurance industry’s response to climate risk cannot be piecemeal. “If you look at a catastrophic loss, government payouts under national disaster schemes and insurer payouts together often cover less than 10 per cent and roughly 90 per cent remains uncovered,” he said, stressing the macroeconomic consequences.
Singhel argued that the solution lies in layered, multi-stakeholder approaches such as catastrophe bonds, tiered risk pools, and explicit government participation alongside industry capital.
He cited international examples like Japan, the UK, and Australia and urged India to adapt global mechanisms to domestic scale. “The problem is massive and we are not fully comprehending its magnitude. We need a roadmap that stitches together markets, instruments, and public support,” he added.
EVs, autonomous vehicles, and evolving liability
Electric vehicles (EVs) present both opportunities and new risk profiles. Singhel described how insurers have studied EV markets to design Indian solutions like cover for battery failures, charging-station infrastructure, breakdown assistance, and layered liability models.
He warned, however, that as autonomous driving grows, liability questions will intensify. “If a self-driving car crashes, liability may shift to manufacturers — that will change underwriting and claims dynamics,” he said.
Yashish Dahiya, Chairman & Group CEO, PB Fintech, flagged the rapid rise in EV-related product searches and customer demand, which, he said, signals that EV insurance is scaling. However, he cautioned that product design must anticipate shifting third-party and product-liability risk over the next decade.
Cyber risk: low penetration, huge economic drag
Cyber exposures have ballooned with India’s digital adoption. Naveen Chandra Jha, MD & CEO, SBI General Insurance, underlined the scale of the challenge. “Cyber fraud losses and related leakages are material enough to dent GDP, and a large share of incidents go unreported. With over 600 million daily UPI transactions and rising digital footprints, individual and institutional exposures are growing faster than awareness,” he said.
Jha noted that insurers are launching products that go beyond payouts to offer response roadmaps and remediation services.
Anup Rau, MD & CEO, Generali Central Insurance, highlighted the education gap, saying that products exist but individual take-up remains low. He urged insurers to build retail cyber franchises and to reframe cyber as a mainstream, preventative product rather than a niche corporate cover.
Behaviour, incentives, and data-driven underwriting
Panelists agreed that underwriting must evolve from static, backward-looking models to dynamic, behaviour-linked frameworks. Rau described initiatives that incentivise risk-reducing behaviour, such as offering premium benefits to small businesses that fortify assets or cut carbon footprints. “Underwriting has to move beyond the purely technical to create a virtuous cycle where customers are rewarded for prevention,” he said.
Sudden frequency changes in perils mean classical actuarial windows no longer suffice. Jha urged more dynamic, climate-sensitive pricing using granular meteorological and geospatial data and AI-enabled loss modelling to keep pricing accurate and claims predictable.
Capacity, pooling, and mandatory cover: aligning incentives
The speakers stressed that insurance penetration, especially for homes, micro, small, and medium enterprises (MSMEs), and catastrophe exposures, remains the structural barrier to resilience.
Dahiya proposed a pragmatic nudge: make certain basic covers mandatory for access to essential utilities or services, much like motor insurance is required for vehicles. “It should be something like you must buy health cover to get electricity at home,” he said.
Singhel and Jha both argued for pooling and structured reinsurance solutions to build capacity for extreme events, noting that without mandatory participation and state co-investment, the industry alone cannot absorb tail losses.
Distribution, partnerships, and shared responsibility
The panelists called for deeper partnership models across the value chain. Dahiya urged distributors, service providers, and insurers to become “partners in risk” rather than adversaries at claim time. He said commissions and expense debates must give way to combined operating-ratio thinking that rewards superior risk selection and loss mitigation.
Technology firms and insurtech platforms were repeatedly identified as crucial allies for risk selection, real-time telemetry (in motor and commercial lines), fraud detection, claims automation, and customer education.
Jha said collaboration with tech specialists is “very important” to keep pace with perpetrators of cybercrime and to manage complex product servicing.
Customer economics: affordability, accessibility, and awareness
The panelists stressed the “three A’s” — affordability, accessibility, and awareness — as the core pillars of scaling protection. Jha pointed to recent tax changes that lowered GST on health insurance as an example of how policy can boost affordability and awareness, and urged insurers to push distribution into tier-II and rural India to improve accessibility and volume.
Rau said, “More affordable renewal premiums could improve retention and build a robust retail base that is easier to educate about add-on covers such as cyber.”
The industry leaders highlighted that new-age risks require a systemic response that mixes market innovation, regulatory nudges, and state participation. Products and pricing must become more dynamic, liabilities must be pooled across public and private balance sheets, and consumers must be nudged into basic protections that underpin economic resilience.
As Singhel put it, the industry must recognise the scale of the challenge and co-design solutions with government and capital markets. “We have the building blocks — catastrophe bonds, risk layering, tech, and evolving underwriting — but we need a national programme to stitch them together,” he said.