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SBI General Insurance expects 20% growth in FY22

Shobha Roy Kolkata | Updated on October 19, 2021

Prakash Chandra Kandpal, MD & CEO, SBI General

‘Health insurance industry is expected to double in the next three-four years’

SBI General Insurance is expecting close to 20 per cent growth in business in FY22 backed by a steady demand for health insurance products and an improvement in motor insurance starting third quarter of this fiscal.

In the first half (April-September), the non-life insurer had witnessed 14 per cent growth in gross direct premium underwritten to ₹4,129 crore, as compared with ₹3,620 crore in the same period last year, as per data available on the IRDAI website.

According to Prakash Chandra Kandpal, MD & CEO, SBI General, the non-life industry has come back to the pre-Covid level and has clocked a growth of around 13 per cent in the first half of this fiscal. “The industry is estimated to grow by around 15 per cent during the current fiscal driven mainly by health and motor. Though there may be some challenge for motor due to chip issue, Q3 should be good for motor insurance. We (at SBI General) expect to grow by around 20 per cent. The key areas of focus for us will be health, motor, SME and rural,” Kandpal told BusinessLine.

The second half of the fiscal is usually considered to be busy season and with the economy opening and with vaccination gaining pace, the insurer is hopeful of clocking a good growth.

Motor insurance accounts for nearly 25 per cent of SBI General’s total business; crop around 25-30 per cent; health close to 20 per cent; fire 15 per cent and others account for remaining 10-12 per cent.

Growing demand

Health insurance, which had been witnessing traction on the back of government initiatives such as Ayushman Bharat, came to the fore due to Covid related hospitalisation and the rise in medical cost. With the kind of effort given by the government in creating medical infrastructure in the country, the total health insurance industry is expected to double in the next three-to-four years.

“After the second wave we saw an increased interest in both retail as well as group health cover. Companies doubled the coverage for their employees. We are seeing a 40-50 per cent growth in health insurance industry portfolio and this trend is expected to continue moving forward as the uninsured population in India is still high,” he said.

This apart, a majority of the people who have health insurance, are not “adequately covered”. Most consumers in India have an average health cover of ₹ 3-5 lakh. However, the recent spike in hospitalisation and the increased medical cost is pushing more and more people to go in for a higher cover.

‘Claims spike’

On the claims side, the non-life insurers had witnessed a sudden spike in claims in Q1 of this fiscal due to the second wave. However, with the increase in vaccination and with people becoming more aware and paying more attention to health and fitness, the claims could be more manageable for insurers.

“The spike in claims was mainly because of the non-standardised protocol being followed by the medical industry. Moving forward we may see that the number of claims may increase but the average claims might be lower,” he said.

Published on October 18, 2021

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