 "General Insurance CEOs")
"India is the fifth largest economy in the world, but we are at the 15th spot when it comes to insurance coverage and that is an anomaly," said Bhargav Dasgupta, the chief executive officer of ICICI Lombard General Insurance at the Business Standard BFSI Insight Summit on Tuesday. We believe that if the "insurance for all by 2047" agenda has to be realised, we need to move towards more freedom in terms of regulations and towards a principle-based outlook instead of a rule-based one, Dasgupta added.
Responding to Business Standard's query about the lack of insurance penetration in the country, the co-founder of PolicyBazaar, Yashish Dahiya, said, "General insurance industry coverage is not something that can be changed overnight and I think the groundwork has been done to expand insurance coverage in the country." He added that the "asset base" in the country has to increase to effectively widen the reach of the general insurance industry.
Dasgupta of ICICI Lombard General Insurance highlighted that the industry needs an atmosphere where the regulator can have confidence and trust in the industry. He added that the players engaged in the general insurance industry also need to act responsibly. We also need to make regulatory changes, keeping the industry's needs in mind, Dasgupta said.
Speaking about the growth in the insurance industry, Dasgupta said that if we examine the growth of the general insurance industry, the cost of insurance products has decreased in recent times, and still, the industry has grown by 15-20 per cent compounded rate per year. The Indian general insurance industry is performing better than other countries, he underlined. This industry has the potential to expand and reach Rs 10 trillion within six to seven years, Dasgupta added.
Kishore Kumar Poludasu, managing director and chief executive officer of SBI General Insurance, said that as India aspires to be a developed nation by 2047, there is ample push in the insurance sector. On the penetration of general insurance in India, Poludasu said, "In the US, what we observe is that general insurance is higher than the life insurance penetration. But in India, the situation is completely reversed."
He added that the insurance sector has to strengthen its internal structure for better risk management. "New products, innovative ways to deal with customers and digitisation will help in improving penetration and awareness across India," he said. General insurance penetration through these means can rise by 20-25 per cent, Poludasu added.
Speaking about the Bima Sugam scheme and Bima Vahak promoted by the government and Insurance Regulatory and Development Authority of India, Yashish Dahiya of Policy Bazaar said that this effort to expand insurance coverage is welcome. This can act as a new channel to attract more customers.
Echoing Yashish Dahiya, Kishore Kumar Poludasu said that Irda's new initiative, "Bima Trinity", is a game-changer. "Bima Vistaar provides comprehensive coverage for life insurance, general insurance, and health insurance. Bima Sugam is an online platform that will help customers and insurers come together," he added.
Dahiya talked about the mindset of consumers buying insurance products and said there is a degree of distrust regarding claim settlements. While the insurance industry is performing well and settling claims based on their merit, the common perception among people is different. The industry should work to increase trust. This can truly expand coverage, and 25 per cent of people who can afford health insurance will start buying insurance, Dahiya said.
Ritesh Kumar, managing director and chief executive officer of HDFC Ergo General Insurance, said that the insurance industry needs to attract capital, which will help align rules and regulations with those overseas.
On risk-based solvency, he said, "Risk-based capital will move to a principle-based solvency. People who have diversified portfolios will need to hold less capital." He added, "Risk-based solvency will consider market and credit risk. It is a holistic measure rather than rule-based solvency."
Discussing the challenges the industry faced during the pandemic, Dasgupta said that the industry paid between Rs 30,000 crore and Rs 40,000 crore worth of claims during the pandemic. "We never approached the government or sought any exemption from claim settlements," he said. Dasgupta highlighted that the general insurance industry remained resilient during the pandemic and stood strong. This was a true test of the industry's capabilities, and the general insurance industry performed admirably, Dasgupta highlighted.
Speaking about health insurance, Dahiya said that health insurance is a complex area where people tend to blame the insurance companies but do not question the hospital that overcharges. Hospitals tend to charge more if they know a patient is insured. He said large-scale assets are mostly insured; what we need to do is expand the reach to the general public.
Ritesh Kumar of HDFC Ergo said, "At its core, health insurance needs to be affordable. It is a complex issue as we are a regulated industry, but the provider (health service) is not regulated."
