LS poll results: Regulatory focus on growth may continue, say insurers

The regulator’s focus on growth of the insurance industry is likely to continue irrespective of which political party forms the government, industry players said.

The ruling Bharatiya Janata Party (BJP) failed to secure a simple majority in the general elections, votes for which were counted on Tuesday.

The National Democratic Alliance (NDA), of which BJP is a part of, has crossed the majority mark, including leads.

“We are gunning for ‘Insurance for All' by 2047 under the guidance of the regulator. There is a lot to be done towards that goal and a lot of work has already started, especially in the state-level insurance plans. So, regardless of what happens nationally, our work is cut out. And, we are continuing to look at how we can have awareness, accessibility and affordability,” said Vibha Padalkar, managing director (MD) & chief executive (CEO), HDFC Life Insurance.

According to insurance officials, the increase in insurance penetration will be supported by the government irrespective of the political parties because of the sector’s importance.

“Most of the changes in the industry are led by regulator. Direction from the government is also important, but there is no pending regulation from the government. So, whichever government comes in, continuity is expected,” said Rajagopal Rudraraju, executive vice-president & national head — accident & health claims, Tata AIG General Insurance.

Industry representatives said in case a new government is formed, it is unlikely to reverse any previous decision by the regulator.

“Regardless of whatever is happening nationally, it is in everyone's interest that insurance penetration goes to a level so that at least basic levels of certainty in one's life are reasonably covered,” Padalkar added.

Some insurers said the government has a key role to play in the future of the industry due to its contribution to economic progress.

“The role of the insurance regulator is very important. It is also crucial to always have a government with a progressive mindset,” said Sharad Mathur, MD & CEO, Universal Sompo General Insurance.

“A government with a forward-thinking mindset will uphold insurance inclusion in India. If the economic progress in the country is low, insurance growth is likely to lag. When the economy progresses, insurance can act as an enabler to secure and continue the progress. The new government is likely to drive infrastructural development, resulting in the growth of infrastructure related insurance in the country besides health, term and assets insurance,” said Sharad Mathur, MD & CEO, Universal Sompo General Insurance.

The government’s approval on certain requests will give an impetus to the growth of the sector.

The insurance industry remains hopeful of getting approval of the Draft Insurance Amendment Bill, which will allow composite licensing.

It will help a company undertake life, general or health insurance under one entity. The Bill recently received parliamentary panel’s approval in February.

An insurance official said, “When there is a change in the government, there could be some macroeconomic changes at the policy level, which affects industry dynamics. However, when it comes to composite insurance Bills, most of the discussions and debate is already done. This is irrespective of the government which comes to power.”

Similarly, the insurance industry has long-standing requests about rationalisation in goods and services tax (GST) rates of 18 per cent on health insurance. Also, it seeks reduction in term life insurance-related GST rates, which will aid in penetration of insurance in the country.