Encouraged by an increasing customer base, Marsh India Insurance Brokers is eyeing 20-30 per cent business growth every year. Country head and chief executive Sanjay Kedia said this was because the non-life insurance sector was growing 15-20 per cent a year and insurance broking was seeing good penetration.
“Insurance broking has the potential to grow at a faster rate than the insurance market. Marsh India has experienced healthy growth, particularly post de-tariffing, which requires customers to have an advisor and a broker on their side,” he said. The company, which has completed 10 years of operations in India, handles premium of about Rs 1,500 crore a year in the country.
Kedia said among business segments, group health had seen the highest growth, both in terms of premium, as well as policies. “The average premium rate rise for the group health segment was about 15 per cent,” he said. This had been aided by a 10 per cent rise in broker market penetration, he said, adding now, most companies were availing of the services of insurance brokers, at least for one line of business.
A third of Marsh India's business is accounted for by group health. Kedia said this would rise to 50 per cent in three years. The company plans to increase its client-base every year. “From 300 corporate clients four years ago, we have grown to 2,000-plus corporate clients,” he said. Of these, about 800 are Indian companies, while the rest are multinationals. Marsh India has 300 employees across eight cities. Kedia said the company planned to expand into smaller towns.
The company was the first foreign broker and risk advisor to secure a broking licence from the Insurance Regulatory and Development Authority (Irda). While Irda has assured the broking community it would take up the matter of issuing long-term licences to brokers, Kedia said other issues should also be addressed. “Worldwide, brokers handle both premiums and claims; we believe this should be practiced in India, too,” he said.
With the insurance sector seeing a rise in mergers and acquisitions (M&As), Kedia said consolidation would be seen in the insurance broking industry, too. "We see the need for M&As in the insurance broking industry to drive scale and efficiency. However, this is currently constrained due to the foreign direct investment (FDI) cap of 26 per cent in the sector. Once FDI moves to a higher level, ideally to 100 per cent, M&As would grow rapidly," he said.