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The general insurance industry is likely to bounce back to pre-Covid19 levels by mid-to-late 2021, according to Anup Rau, Managing Director and Chief Executive Officer, Future Generali India Insurance.
“I do believe the worst is behind us. I am seeing an increase in economic activity and improvement in sentiment and therefore, consumption,” Rau told Business Line .
Return to normalcy is also being driven by the fact that companies and intermediaries have learned to use digital tools and new ways of prospecting, engaging and serving clients.
“Of course, if there is another wave or lockdown, we could see a temporary dip again, but I see very strong growth by mid-to-late 2021, if not earlier,” he said.
Impact
On the impact of the pandemic on general insurance, he said that businesses are resuming normal operations gradually, post the unlocking of the economy. People need to consume goods and services first, only then will they have something to insure.
“At the same time, insurance is what will give the industry confidence to deploy capital and resume economic activity. Insurance will pay a critical role in starting the capex cycle again, said the Future Generali India head.
On the spike in the demand for health cover, Rau said besides Covid-specific covers, customers should ideally take comprehensive cover, which is renewable, and covers them for a long time.
The Year To Date (YTD) September FY21 insurance sales show that for the first timeever, the health insurance segment has surpassed motor segment.
The motor premium contribution is 29 per cent and health 30 per cent. “However, this should be looked at in the context of immobility and lower than normal demand fulfillment too imposed by lockdown. Nevertheless, health insurance segment will continue to grow and might become dominant in near future,” he said.
With reference to the recent floods in Hyderabad, which caused huge devastation, Rau said his company received close to 170 claims so far amounting to over ₹10 crore. “By a very rough estimate, the overall industry could have had around 8,000-9,000 claims,” he added.
|According to industry sources, the total claims could amount to a minimum of ₹100 crore to ₹200 crore in Hyderabad alone in view destruction of vehicles and properties.
Future Generali has been ‘early and fast’ in adapting to the challenges posed by the pandemic.
“We mandated and enabled Work From Home much before the government-mandated lockdown. Today, we recognise and believe that the five day work week, the way we understand it, isn’t coming back,” he added.
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