The general insurance sector in India is facing a unique paradox - an economy with abundant growth potential and an under-penetrated insurance market. In such an environment, it will be difficult to say which of the segments - retail or corporate - will take the insurance sector forward. It would also be unfair to choose one over the other.
One thing is certain: India will grow. Various economists believe the Indian growth story is intact. Obviously, like any growth story, it will have its ups and downs. Nobody has said India will not grow. This effectively means there will be more projects, more infrastructure developments and service sectors coming in and the current economic environment is temporary. From an industry perspective, it will effectively mean we shall be providing insurance solutions to cover various risks. So, definitely, there is growth potential in the corporate line of business.
If I look at the penetration level today, for basic insurance such as health, home or personal accident, it is dismal. There has been a clear trend that health insurance is the fastest-growing segment, which shows people are taking care of their health and looking at insurance from a different perspective. As the distribution of the insurance sector strengthens and the average wealth of Indians rise, the penetration level of India, in personal lines, which is around five per cent, will move closer to the levels in developed markets of 80 per cent. This technically means the retail line of business is bound to grow exponentially.
In the current environment, we can safely say the retail segment will be the one going forward. That is because the present Indian economy looks gloomy. So, obviously, all our thoughts are blurred and everyone is looking up to the retail segment. However, in future, the insurance sector will also have strong growth in the corporate segment. It will be difficult to say which segment will take a lead over the other.
My take is that both the segments will find their own growth spaces and make a difference to the insurance sector. This really excites me. I am excited about the innovations that will come in the distribution network, new products, new or emerging distribution channels, etc. It is going to be forever evolving and I am sure the industry will continue to prosper and do well.
MD & CEO, Bajaj Allianz General Insurance