India Focus Making Tender

Dr Subhash Khuntia Chairman Insurance Regulatory and Development Authority of India IRDAI today called upon the insurance companies to make use of the tremendous opportunity available to grow the insurance market.Speaking at FINCON 2019 - 20th Annual Insurance Conference organized by FICCI Dr Khuntia said Many of you look at market share. But I suggest dont be too bothered about improving market share. If growth is high you dont have to bother about market share. Put your heads together to make the market grow.Highlighting the huge protection gap in the country Dr Khuntia said It is important that you provide protection to customers. He further added that in a market with such huge opportunities insurance companies will be comfortable even if their market share doesnt grow.He added that in the first year of liberalization India had just five life and nine non-life insurance companies. Both the numbers rose to 15 during the next four years. But during the first five years only three life and 13 non-life companies reported operating profit. You must remain financially sustainable Dr Khuntia cautioned.He said that currently there are 24 life and 34 non-life insurance companies. Last year the overall rate of growth of premium was 13 per cent higher than the economic growth of the country. India being a young population this demographic characteristic is expected to continue for the next several years offering insurers a very good atmosphere in which to operate. Of the life insurance companies 21 are reporting operational profit compared to 25 in the non-life sector Dr Khuntia added.He called upon the non-profitable companies to introspect. Those struggling will have to change course and see that long-term sustainability is ensured he said.IRDAI Chairman announced three initiatives that IRDAI will be setting-up soon. They include i establishment of a risk-based capital system a self-regulating mechanism where those who manage risk better will be allowed to operate with lower capital ii risk-based supervision and iii introduction of IFRS International Financial Reporting Standard 17. I am not in favour of unnecessary control but would like to have broad regulations and within that self-regulation on your part he said.He also lauded the insurance industry for the high level of talent within and called for it to be harmonized to develop trust among customers. IFRS 17 he informed has been postponed to 2022 globally. India has also postponed its introduction but IRDAI needs the help and cooperation of insurers during the preparatory phase prior to its introduction. He assured complete support from IRDAI in working with them through FICCI insurance councils and other forums that can be created.Other areas where insurance companies need to pay attention include the protection of policy holders from unfair practices development of new and innovative products catering to the requirement of the current crop of tech-savvy consumers increasing penetration to cover the low-income population and management and mitigation of risk he said.Dr Khuntia added that IRDAI is coming up with a regulatory sandbox. He called upon all companies to look into corporate governance standards and expressed confidence that the insurance industry will not run into the kind of problems faced by NBFCs.Mr Alpesh Shah Managing Director India Boston Consulting Group said that since the insurance industry in India privatized in 2001 it was now in its 18th year. And like a teenager its journey was like a roller coaster ride beset with problems opportunities and challenges. He said Chief among these is changing consumer behaviour across the population. This was brought out sharply in a recent BCG survey where 77 per cent of consumers were willing to consider non-traditional insurance products covering dental spectacles and jewellery. Moreover 88 per cent of them were willing to try out new media to purchase insurance. Insurers now have the option to offer personalized byte sized bundled products. Can we create such an offering he said.Mr Bhargav Dasgupta Chairman FICCI National Committee on Insurance and Managing Director CEO ICICI Lombard General Insurance Company Ltd. compared the trajectory of the insurance industry in India to that of a human moving from childhood to teens to youth. Teens were a special period in our lives he said adding that it was a time of taking risks and learning through experimentation. But the analogy ends there. As an industry if we follow the same norm we would lose a lot of opportunity he added.Mr G Murlidhar Co-Chairman FICCI National Committee on Insurance and Managing Director CEO Kotak Mahindra Life Insurance Company Ltd. described the events theme as extremely important as it captures the metamorphosis of a young industry. He thanked the speakers and delegates for setting the tone for the rest of the sessions.