The Indian Insurance Industry, which has been described as a ‘Sunrise” sector with its Rs two lakh crore business potential, is still facing many ups and downs — despite a fillip being given by the Indian Government in the form of FDI being increased to 49%, according to Manoj Jain, MD, Shreeram Life Insurance Company.
While the public sector is the ‘backbone’ of the Indian Insurance Industry, digitization had been chosen and adopted by the insurance sector to speed up and ensure easier transactions, though efforts to increase insurance penetration in the country have not even ensured double digit results, Jain lamented while urging for more progress in this regard at the “Insurance alerts Conclave and Excellence Awards” held in Mumbai recently.
“India is the fastest-growing economy in the world with its GDP expected to grow around 7.7% to 8%, besides 8% to 10% increase in Per Capita income. However, with barely 13.6% insurance penetration, India still remains ‘under-insured’ in comparison with even nations like Pakistan and Bangladesh,” he said while noting that the Indian insurance sector’s potential is huge with also almost 50 insurance companies in this field going the extra mile to cover business in the three sectors of health, general and life insurance.
“The current insurance industry’s potential is huge at around Rs two lakh crores and the Union Finance Minister stated that the country would require atleast five companies the size of the Life Insurance Corporation of India (LIC) to meet this demand. However, at present 10 Indian insurance companies are bleeding very badly as they are not getting the capital invested in this,” he said.
“There is some ‘Fundamental Disconnect’ due to no valuation, and because there is no business, or good quality or persistence – despite the Government having done much to promote the insurance industry – this is destabilizing this industry,” he said, adding that two Government schemes — Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana that had been introduced by the Union Finance Ministry – had affected the various companies insurance business.
He said insurance distribution costs too need to be looked at as the people involved in this industry did not get sustainable commission, besides the huge processing costs also being involved and the customer not gaining in the process. “Some positive answer is coming from the Digital Initiative where distribution can be defined. For our company, the common truck driver is our customer with about 80% of their business conducted on mobiles to the tune of Rs 800 crores,” he added.
Pointing out that a company co-partner from South Africa had remarked about mobile insurance doing good business in his country and why it was not being done in India, Jain lauded the advent of digitalization, stating “I thought nobody could replace the +Feet-in-the-Street+ model, but the Digital Initiative can help us in reducing distribution costs through its huge base in this industry. Digitisation is possible and general insurance can be issued over the counter with the entire process taking barely 30 minutes. Insurance companies have spent heavily on digitization though incomes are yet to come in.”
“China witnessed lakhs worth of insurance policies being sold on mobiles in barely three hours of digitalization. So with 15 million internet users in India, we are in a huge industry with massive untapped potential and the Government is pushing heavily for usage on the digital platform as it is helping and empowering customers by providing value,” Jain noted.
Amber Gupta (Head – Legal & Company Secretary), Aditya Birla SunLife Limited, said the insurance industry faced a strange paradox: whether to increase customer base by offering low rates or vice versa.
Describing Agents as the backbone of the Insurance industry, Vivek Jain of Insurance Alerts, said these agents are spread all over the country including remote areas, but have no access to news on Insurance industry. The ‘INSURANCE ALERTSS’ platform was conceived to bridge this gap and meet the needs of insurance agents and insurance professionals in gaining free access to insurance news, he said.
Jain said INSURANCE ALERTSS, which had organized the Conclave and is India’s largest & Asia’s second-largest dedicated Insurance e-news platform, provided exclusive global Insurance news in English and Hindi with prime focus on India and would be available in all regional languages soon. INSURANCE ALERTSS presently reached out to over 50,000 insurance professionals in 30 countries — including over 40,000 insurance agents based in 160 Indian cities including the top tier 125 cities — by way of mobile app, website, newsletter, sms and whatsApp.
The Conclave, which witnessed participation of many insurance companies including the New India Assurance Company Limited, National Insurance Company Limited, Shriram General Insurance Company Limited, United India Insurance Company Limited and the Insurance Brokers Association of India, also featured discussions on topics like “How intermediaries can grow their business through Technology?” and “Indian Insurance Industry – Vision 2021?”
Kamalji Sahay (Former MD & CEO, Consultant, Author and Columnist) received the “Life Time Achievement Award 2018 from Vivek Jain (Editor-in-chief), Insurance Alertss, while Vighnesh Shahane (Managing Director & Chief Executive Officer), IDBI Federal Life Insurance, received the “Best CEO of the Year Life 2018” Award.
Mayank Bathwal, (CEO), Aditya Birla Health Insurance Company Limited, received “Best CEO of the Year Health 2018” Award, while Yusuf Pachmariwala (Chief Operating Officer), Tata AIA Life Insurance Company Limited, was given “Best Chief Operating Officer of the Year 2018” Award.
Avinanda Ghosh (General Manager-Chief Information Officer), Agriculture Insurance Company of India, received the “Best Technology officer of the Year 2018” Award, while Lalit Sharma, General Manager, (MD) India Health Insurance TPA Pvt Limited, received the “Best Claim Management Officer of the Year 2018” Award.
Amber Gupta, Head-Legal, Adity Birla Sun Life Insurance Company Limited, received the “Best Legal & Compliance Officer of the Year 2018” Award, while Ms. Flovie Martins, (Assistant Vice President- Corporate Communications), Future Generali India Life Insurance Company Limited, received the “Best Communication Officer of the Year 2018” Award.
