)
While most private general insurers are becoming aggressive in the group health insurance portfolio, Future Generali India Insurance has exited unviable accounts in this space. K G Krishnamoorthy Rao, managing director and CEO of Future Generali India Insurance, explains the strategy to M Saraswathy. Excerpts:
Future Generali has begun to post profits with the September quarter showing net profits of Rs 16.8 crore. What steps have you taken to improve profitability?
Positing profits and entering profitability in business is a good sign. We have been able to achieve this by getting out of businesses which were not viable. There are certain segments in the general insurance industry where the rates are not economically viable. Hence, we have exited several accounts in group health and property segment. Through this, we have got profitability into our books.
Growth in total premiums collection has slowed down for general insurance industry. Is there cause for concern?
The general insurance industry has seen a slower rate of growth. This is primarily due to the economic conditions of India. The industry is growing at 12-13 per cent now, compared to 18-19 per cent last year.
There are sector-specific developments as well. Auto sector, in particular, has slowed down. This has reflected in the motor insurance premium as well. However, we could see some improvement in the coming fiscal (FY15). Overall, the general insurance portfolio has started maturing in India.
The company has a relatively larger portfolio of miscellaneous products than other general insurers. Will this strategy continue this year, too?
We have a good mix of miscellaneous products in our portfolio ranging from event insurance to film insurance. While this accounts for a small share of our product line, the segment has seen good growth in business, especially in film insurance.
This year, we will have new products in this space this year. One area we are looking at is extended warranty insurance, where we will launch new products in 2014.
Insurance repositories now offer to maintain digital life insurance policies. Will this make a difference to general insurance industry, when it is allowed in the segment?
Insurance repositories will enable electronic storage of insurance policies. Although it is expected to be operationalised for general insurance products as well, it will be a while before non-life policies become completely paperless. Segments like motor insurance may still require policy documents for mandatory third-party segment to be presented in physical format in several situations. Once digital policies are accepted by the other concerned authorities, it will go completely electronic.
Mallassurance is a concept pioneered by the company. Has it become a major distribution channel for you?
Mallassurance, or sale of insurance products in the mall, is not a big share of our business. We will need customers to have increased awareness about insurance before they can purchase a policy off the shelf. However, we are a patient player and are hopeful of the potential of this medium in the future.
