Amid rising compliance standards, coupled with greater integration of domestic companies with their global peers, general insurers are spotting a big growth opportunity in financial liability insurance segment, which is poised to clip at over 30 per cent annually going ahead.
"There has been an increasing demand for financial liability insurance products like directors and officers' (D&O) liability insurance, professional indemnity, and errors and omission products among others in the recent past.
"We hope this segment to grow over 30 per cent per annum going ahead," Bharti Axa General Insurance chief executive Amaranath Ananthanarayanan told PTI here.
He further said the rising overseas operations of domestic companies would also support this growth trend.
As per industry officials, the financial liabilities insurance segment is under Rs 1,000 crore as of now but is attracting keen interest from corporate houses given the higher level of compliance norms and investor activism among others.
Companies are looking for products like D&O cover which include all kind of liabilities arising out of activities like sexual harassment charges, discrimination of any kind or fraudulent actions done by directors or officers, etc, to cover rising claims.
"Importance of financial liabilities products have been realised after the Satyam scam. Currently, with provisions like class suits, personal liability of independent directors under the new Companies Act, financial liabilities products are likely to see higher demand from domestic corporates," ICICI Lombard Head underwriting and claims Sanjay Datta said.
With rising investor activism and employee awareness, these products would see greater momentum going ahead, he added.
"Globally, the D&O segment is a USD 10-billion market. Things will slowly catch up in this market as well," he said.
An official from New India Assurance also concurred saying despite being a small segment, the trend is quite positive in this space.
"Though this is a small segment in the general insurance industry, the trend is very encouraging. Growth rate is also high now," New India Assurance general manager S Sampath Kumar said, adding his company is well poised to reap the benefit of this new growth area.