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Mr. T S Vijayan, Chairman, Insurance Regulatory Development Authority of India (IRDAI), said that India is poised to become a local reinsurance hub going ahead.
He pointed out that when the industry is congratulating itself for being in a good position, the discussion about the next wave of growth comes up. "That's a great thing to think about."
The arrival of foreign reinsurance companies into the country, the establishment of hubs such as Gift City in Ahmedabad and the Government programmes like 'Fasal Bima Yojana', are very positive signs for the industry. "Maybe, down the lane, India could become a local reinsurance hub; so much can happen," he said, adding that the social, economic and environmental changes all add up to make this possible.
"What's the next wave of growth coming in?" he asked. Motor claims, he observed are about Rs five lakh on an average. With a population of 120 crore people, there is a protection gap. The same is the case with health care. More than Rs three lakh crore are spent by people on health care. This is the kind of premium that health insurance companies can aspire for. "This is where growth is going to come from," he said. He referred to the environmental changes spearheaded by the arrival of 'JAM (Jan Dhan, Aadhar, Mobile)' as a huge driver of growth. All this should help bring down the protection gap.
Mr. Vijayan suggested that 'sum assured' policies, even if they are long term, should be linked with price indexes. It may be challenging, but it is possible today. He also felt that apart from product design, technology should be harnessed so that insurance can also be made more accessible.
He called upon organisations such as FICCI to help create awareness about insurance among the people. "Efficiency is not just collecting premium. How much has the insurance industry integrated various analytics to understand the customer?" This is where the next wave of growth and efficiency will come from, he said.
"The next ten years will be the decade of insurance," he declared, adding, "it is going to lead the financial services sector and the total economy in many ways." The Government's reforms have provided good support for the upsurge in the insurance industry. The key to the next phase of development will be digital distribution, said Mr. V K Sharma, Chairman, Life Insurance Corporation of India, said Mr. V K Sharma, Chairman, Life Insurance Corporation of India.
Mr. Sharma recalled how, 61 years ago, on 19 January 1956, an ordinance brought about the nationalisation of 245 companies. "At that time there was space for 245 companies, and today we are grappling with 24-25 companies!" He expressed thanks to the policy makers and the Government for opening up the sector, saying that it has done wonders for the industry.
Amitabh Chaudhry, Chairman, FICCI Committee on Insurance and Managing Director and CEO, HDFC Standard Life Insurance Co Ltd, said, is a logical continuation of last year's theme that revolved around the changing face of Indian insurance. Digital has impacted insurance greatly. The focus will move towards the product side, and changes can be expected across the product cycle. Standard products have become outdated with the arrival of 'do-it-yourself' models. "Technologies such as the internet of things, artificial intelligence and telematics can change a back office completely." This, he said, will personalise insurance and help in creating a conducive environment for insurance companies.
The insurance industry has just come of age, Mr. Alpesh Shah, Senior Partner and Director, The Boston Consulting Group declared. In the last 18 years, the premium has grown about 13-15 times. "The most visible part in the last six months is listing," he said, pointing out that the six listed insurance companies are among the top 100 companies listed on the market. "Insurance is now a very significant part of India's growth."
Among the top trends of the next wave of growth, Mr. Shah identified India's aging population, which will have 350 million people over the age of 50 by 2030. Other trends included listing; changing risk patterns; demanding customers; Government initiatives; and the arrival of insurtechs. He predicted that there will be greater specialisation in the industry. Entities with access to customers and data will enter the fray and pull away market share. And insurers will be forced to think about customers.
Earlier, Mr. Rashesh Shah, President FICCI and Chairman & CEO, Edelweiss Group, welcomed the delegates, lauding the industry for the progress it has made. He thanked Mr Vijayan under whose leadership the industry saw growth in all dimensions. Talking about some of the key trends witnessed by the industry, he said listing of insurance companies will also bring in greater transparency and higher level of corporate governance which will help the industry garner more trust from the policyholders and this in turn, will help in deepening and broadening the level of insurance penetration in India which has so far remained low. As more companies hit the capital market in the coming years, this will benefit the retail investors as well who will find a new investment avenue in insurance. This again will have a long-term impact in not only helping in mobilising the much-required capital but also in creating greater awareness among the people about insurance.
Another significant development witnessed over the past one year is the rapid adoption of the novel technology advancements like blockchain, telematics, artificial intelligence and internet of things, by the insurance sector. This trend has been more prominent in the non-life insurance space including motor, health and travel insurance, and the sector has already started reaping benefits from this move added Mr. Rashesh Shah.
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