The general insurance industry is seeing an upswing, thanks to rising disposable incomes and more awareness, believes G Srinivasan, Chairman and Managing Director, New India Assurance Company. In an interview with BusinessLine , Srinivasan talk about the plans to improve the profitability of the PSU general insurer and a new product for property developers. He also says that the experience after listing on the bourses has been good. Excerpts:

What is your expectation from the general insurance industry?

The industry is doing quite well. We expect it to grow at 18 per cent to 20 per cent for the next 10 years as we are seeing more awareness about insurance with higher disposable incomes. There is more traction to general insurance products, especially retail products such as health insurance, motor insurance, householders insurance and personal accident insurance. I think by 2030, we should reach the global levels of insurance penetration and density.

What are the plans of

New India Assurance for the current fiscal?

In 2017-18, we posted ₹26,500 crore of premium income with a net profit of ₹2,201 crore. Our combined ratio came down by 8 per cent, with improvement in claims and expense ratio. In 2018-19, too, we are looking at growth and a further improvement in the combined ratio by another 6 per cent, driven again by a drop in the claims and expense ratio. Our strategy to improve profitability is to lower the health-loss ratio and also motor own-damage loss ratio. We have come out with new products such as the P&I insurance.

Are you launching any

new products?

We are ready with a title insurance product which will be launched soon. This is mandatory under the Real Estate (Regulation and Development) Act.

Property developers will take the policy for protection against any defect in the title of the property. The cover will provide compensation for defects or even for legal costs incurred in defending the title. We are waiting for the State governments to make it mandatory and also for the implementation of RERA. Eventually, it can also be taken by banks, which provide loans for title insurance as well as individuals. But all this is when the product settles down.

How has the experience been after listing? Is a follow-on public offer being planned?

The experience has been good. The company is clearly focussed on improving the profitability and in continuing to be a dominant player in the market. We are geared to provide value to our shareholders.

What will be the impact of the Ayushman Bharat health insurance scheme on the industry?

It is a huge scheme, one that is very important for the benefit of the people. It is in the process of being designed. We are looking at it very optimistically as it has a lot of opportunities for insurers, and more importantly, to provide health insurance to people. We will have to price it and manage it properly. In mass schemes, abuses are likely to take place. We also need to put in appropriate systems to monitor claims within the country to make sure that hospitals don’t misuse the system. We have to have technology control and also on the ground control.

What do you make of the merger of the other three general insurers?

The merger is a very welcome step from an industry point of view. It will help them go to the market, get listed, raise capital, and meet solvency norms to be more active in the market. The second advantage is that competition in the industry will come down and will ensure proper pricing.

Also, it is good to have a big company to ensure that claims are properly managed and also the interests of policyholders. Indian insurance industry actually needs big companies.

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