InsureTech to be next big disruption in insurance: National Insurance CMD

Ahead of the planned merger of the three government-owned general insurance companies, Tajinder Mukherjee was recently made chairman and managing director of National Insurance Company. Edited excerpts of a talk with Namrata Acharya:

Your vision for National Insurance over the next year, especially in light of the merger process?

Till the merger happens, it is business as usual. We are looking at improving our combined ratios, the company’s results and brand image, which has good recall quality. Once the merged entity is in place, we will be the largest company in India, about 31 per cent market share.

What is a realistic timeline for the merger?

It looks difficult this financial year, with only some months more. Definitely, the next financial year will be the target.

What practical challenges do you see in the process?

IT (information technology) is the main challenge, as each of the three companies are on different platforms. The consultant will have to come out with a solution for smooth migration -- we do not want our daily business to be affected.

Irdai (the sector regulator) recently proposed the sandbox method (allowing insurers to test products in a region or among a set of policyholders before making it generally available) for new products. 

It is a good thing. It will allow us to experiment for both products and processes, to check their efficacy before finally adopting these.

What innovations can be rolled out in the Indian market?

There are various types of insurance products abroad. For example, against loss of employment, savings-linked insurances, etc. These are available in a limited way in life products but not widely. We can also look at creating on-demand insurance for micro events, maybe.

Your view on Irdai mandating GIC being given first preference for buying reinsurance?

In the Indian context, GIC has always enjoyed first preference. Now, it has come formally. Even otherwise, it was getting the largest amount of business, as it is best placed to understand the Indian insurance business.

Isn’t this restrictive?

In a way, yes. As a buyer of reinsurance, I would like an open market.

How best is the Indian insurance sector placed to adopt InsureTech, like fintech in banks?

InsureTech (defined as the blending of technology with insurance) is set to be the next big disruption in Indian insurance. It will change the way people buy insurance products. New technology and Artificial Intelligence will transform the future of claims management, too.

Do you see insurance products being rolled out as a part-government welfare scheme as accounting for a major part of the portfolio of insurers?

PMFBY (the state-sponsored farm crop cover) has generated good revenue in the past two years. In 2017-018, it was 17 per cent of the General Industry Premium. As for the Ayushman Bharat health protection scheme, a few states have opted for the insurance model this year.  We could see some changes in the next year, based on the experience.