As new regulations are introduced in the Indian insurance market, there will be more players entering the field and may result in mergers and acquisitions, according to Mr Anil Kumar Aggarwal, managing director & CEO of Shriram General Insurance Company.
In an interview with the Indo-Asian News Agency, Mr Aggarwal says that India’s insurance industry is witnessing tremendous growth due to growing income, increasing awareness, and technological developments in the industry. The year 2022 has been one of the best years for the general insurance industry.
The Indian insurance industry has also seen several changes in consumer behaviour and attitude towards insurance because of the COVID-19 pandemic which has affected every branch including health, automobile, and motor insurance.
Digital experience
Post-COVID-19, customers are expecting improved digital experience from insurers. Also, there is a growing demand among the millennials for cyber insurance, Mr Aggarwal says.
InsurTechs are also playing an important role in the increase in demand for commercial insurance. Post-pandemic, the insurance industry has redefined its working standards to cope with the market situation. Motor insurance premiums are rising after the pandemic.
The InsurTechs are leveraging technologies such as Artificial Intelligence (AI), Machine Learning (ML), big data and the Internet of Things (IoT) to improve insurance processes, creating a big change.
Regulations
Meanwhile, the IRDAI has been introducing several new regulatory measures that have the potential to quicken business growth for insurers and to deepen the insurance penetration in India, says Mr Aggarwal.
For instance, the IRDAI’s decisions this year to increase the maximum number of tie-up limits for corporate agents and insurance marketing firms have created a positive wave aiming at overall sectoral growth. This has laid a smooth path for insurance companies, corporate agents and insurance marketing firms and widens choices for policyholders.
In addition, the IRDAI’s framework like the Regulatory Sandbox/Use and File procedure will also provide insurers with the space to test innovative products in a controlled manner. “The increased experimentation period from six months to 36 months will help us in improving test results,” said Mr Aggarwal.
The IRDAI’s one-stop solution Bima Sugam platform will provide unbiased comparisons to customers and will likely change insurance buying patterns. “It will be a big game changer for the end user and companies will also get an advantage,” he said.
Looking ahead
Commenting on forthcoming developments, Mr Aggarwal said, “The Indian government has proposed changes to the two insurance laws — Insurance Act 1938 and the Insurance Regulatory and Development Authority Act, 1999.
“It proposes to eliminate the provision of the Insurance Act that mentions the minimum capital of INR100 crore ($12.1m) for life, general, and health insurance companies and INR200 crore for reinsurance businesses. The removal of the minimum capital requirement will invite a lot of micro and regional insurers to enter the insurance sector.
“Another proposal is to provide a composite licence to insurers that will allow life insurance companies to sell non-life products and vice versa. It will help companies to sell a combination of products catering to customers’ needs and innovating new products. The challenge here is combining the different skill sets required to handle entirely different portfolios.
“The government has also proposed that insurers be allowed to sell other financial products which should be looked upon as an opportunity for the insurance agents to become a single point of connection for the customers seeking financial products as well as a measure securing them from unforeseen risks.”
