Business Standard Insurance Round Table 2017: Top 10 highlights

Find out what the panellists had to say on demonetisation, crop insurance and industry growth

The insurance industry will go through a major change this year as more private sector life insurers and public sector general insurers get listed on the bourses. How will it change the environment in the industry? Will we see more transparency and better governance? Will the new capital from both institutional and retail investors help the industry to grow rapidly?

Will we see more consolidation in the industry and will smaller players look to exit the business and sell to larger players? What is the extent of digitisation today at insurance companies, both in terms of transactions and internal use? Here are the highlights of the insurance industry on our Business Standard Insurance Round Table 2017 with ICICI Lombard General Insurance Co Ltd Managing Director (MD) & Chief Executive Officer (CEO) Bhargav Dasgupta, The New India Assurance Co Ltd Chairman and MD G Srinivasan, IndiaFirst Life Insurance MD & CEO R M Vishakha, Marsh India CEO Sanjay Kedia, and SBI Life Insurance MD & CEO Arijit Basu.

Here are the highlights of the Round Table: 

1) New India Assurance's Srinivasan: Twenty-two per cent of farmers have been covered under the Pradhan Mantri Fasal Bima Yojana, with the amount crossing Rs 1 lakh crore this year. Further, 60 per cent of the rural economy would benefit from crop insurance and it would also reduce farmer suicide. Over the next three years, a 30 per cent growth is expected in the specific sector and coverage would increase by 40 per cent.   

2) ICICI Lombard's Dasgupta: Crop insurance has become the third-biggest stream of revenue for insurance companies after motor and property. In the past, the challenge was assessing the final yield, but now technology would help with such assessments. However, fragmented landholding and yield being assessed on area basis were existing the challenges. To conclude, the sector would be volatile in terms of profitability. 

3) SBI Life Insurance's Basu: Crop insurance had ensured that we have not felt the impact of demonetisation. The insurance industry grew by 20 per cent from April to October in 2016. Further, the medium-term impact of demonetisation would be positive, with lots of savings coming into banks and customers who are looking for opportunities. Overall, the outlook was good because insurers would be able to reach out to newer segments in Tier-2 and -3 cities. However, November did see a dip for insurers.

4) IndiaFirst Life's Vishakha: The individual category saw 44 per cent growth, with a 40 per cent growth in individual premium for the industry. Overall, 20 per cent growth in a mature industry was commendable. Further, there were positive indicators for growth in the life insurance industry. 

5) Marsh India's Kedia: While overall growth has been good, corporate premiums, however, have not seen a big jump. The motor insurance and health insurance segments saw 17 per cent and 22 per cent growth, respectively. 

6) ICICI Lombard's Dasgupta: Chennai floods saw plenty of calls on home insurance. 

7) New India Assurance's Srinivasan: We will be in the stock market in 6-8 months for listing. However, listing is not to raise capital or for the government to disinvest. 

8) SBI Life Insurance's Basu: As far as digital sales are concerned, we are making progress. However, it is something that still needs to be sought out by the customer. Even in the online channel, our ability to sell depends on the ability to tie up with a distributor. These are the reasons why online sales are not picking up. 

9) New India Assurance's Srinivasan: Customers do research online but want touch and feel while buying. Further, fire and project insurance cannot be bought online. 

10) ICICI Lombard's Dasgupta: We sell more policies online than all aggregators.