BFSI Summit: General insurers call for norms to navigate climate disasters

At the BFSI Insight Summit 2025, insurance leaders urged joint action on climate, cyber, and EV risks - calling for innovation, tech collaboration, and universal insurance coverage

With a surge in climate-related disasters, cyber threats, and emerging workplace models, leading voices from the general insurance industry have called for stronger collaboration between insurers, government, and technology partners to address these “new-age risks”. 

Speaking at a panel discussion moderated by Manojit Saha at the Business Standard BFSI Insight Summit 2025, chiefs of insurance companies shed light on the need for building comprehensive frameworks to protect people and businesses against digital frauds, climate catastrophes, and the risks associated with electric vehicles (EVs) and the gig economy. 

Tapan Singhel, managing director and chief executive officer (MD&CEO), Bajaj General Insurance, noted that climate change poses not only environmental but also economic and social risks. “When a climate disaster strikes, less than 10 per cent of the total economic loss is actually insured. The rest remains uncovered, which has a direct 2 per cent impact on India’s gross domestic product (GDP),” he said. Singhel emphasised the need for a joint strategy between the government and insurers involving “catastrophe bonds and tiered-level risk pooling” to make India’s disaster resilience more robust. 

 

Similarly, Yashish Dahiya, chairman and group CEO, PB Fintech, mentioned that climate risk management cannot be left to insurers alone. “We need alignment of interests between government, industry, and consumers. Mandating basic catastrophe insurance for homeowners, just like motor insurance, can be a simple yet effective step,” he said. 

Dahiya suggested linking such insurance to essential utilities like electricity or gas connections to ensure universal coverage.

 

Anup Rau, MD&CEO, Generali Central Insurance Company, added that underwriting and claims management must evolve from reactive to preventive frameworks. “We must incentivise customers who take steps to secure their assets or reduce their carbon footprint. This shared responsibility will bring down risk costs over time,” he said, citing a partnership with the UNDP (United Nations Development Programme) to promote such behaviour.

 

Naveen Chandra Jha, MD&CEO, SBI General Insurance, pointed out that climate change is no longer a future concern but a current crisis. “Cyclones that used to occur once in five years are now happening four times a year,” he said, calling for dynamic underwriting practices using satellite imaging, artificial intelligence (AI), and data analytics. He also highlighted the success of a parametric insurance model piloted with the Nagaland Disaster Management Authority, where payouts are triggered automatically based on climatic parameters like temperature or rainfall.

 

Turning to cyber insurance, panellists agreed that India faces a mounting challenge as digital transactions soar. Rao warned that while large institutions are often insured, individual consumers remain highly exposed. “People fall prey to phishing or account breaches, but there is no appreciation of the need for cyber cover,” he said.

 

Jha said that cyber frauds account for about 0.7 per cent of India’s GDP, with actual losses likely closer to 2 per cent due to underreporting. “With 600 million Unified Payments Interface (UPI) transactions happening daily, cyber risk has grown exponentially. Insurers are responding with new products that even cover risks like password sharing or social engineering fraud,” he said. Jha added that collaboration with tech firms is crucial as “cybercriminals are always two steps ahead”.

 

On the evolving motor insurance landscape, Singhel said EVs bring new challenges, especially related to battery safety and infrastructure. “We are looking at global EV insurance models and customising them for India. Our focus is not only on accident coverage but also on roadside assistance, charging infrastructure, and battery-related risks,” he said.

 

Industry experts said insurers are keeping pace with the fast-changing EV ecosystem. “EV insurance in India today is quite robust,” one executive said, noting that the segment is evolving in complexity just like automobiles themselves. “The real test will come when self-driving cars arrive — that’s when liability determination will become an entirely new challenge for insurers and courts,” the executive said.

 

Dahiya said: “About 5.5 per cent of our motor insurance searches now relate to EVs — a 65 per cent jump over last year. Battery protection products are seeing a 67 per cent attachment rate, showing that consumers are aware and concerned about battery risk.”

 

He added that third-party losses may actually be lower for EVs because of safer driving behaviour among early adopters.

 

Rau explained that while claim-handling for EVs is not fundamentally different from other vehicles, the future challenge will lie in assigning liability once autonomous driving becomes common. “Ultimately, liability will stay — whether with the manufacturer or the user — and insurers will adapt as patterns emerge,” he said.

 

Talking about goods and services tax (GST) waiver on health insurance, Jha said it has already improved affordability and awareness — two of the three pillars of insurance adoption. “With GST waived, affordability has gone up, and the media coverage around it has created more awareness. Now it’s our turn as insurers to focus on accessibility — reaching Tier-2, Tier-3 cities, and rural India,” he said.

 

Rau added that while insurers lose some input tax credit (ITC) benefits, customers are saving nearly 16-18 per cent, which will likely improve retention. “Many customers are realising their renewal premiums are lower than last year’s. That’s a big psychological boost and should reduce policy lapses,” he said.

 

Singhel said that while the GST move is welcome, India must go further to ensure universal health coverage. “Health is not a luxury, it’s a necessity. We still have 40 crore-50 crore Indians uninsured, which costs the economy 1.2 per cent in lost growth each year. If everyone were covered, India’s GDP could be 1.2 per cent higher,” he said.