General insurance penetration rising in India, say leaders at BFSI Summit

Heads of general insurance companies discuss challenges and future potential for the insurance sector in conversation with banking editor Manojit Saha at the Business Standard BFSI Insight Summit

At the Business Standard BFSI Insight Summit on Friday, top leaders of India’s general insurance companies expressed confidence that general insurance sector penetration is rising in India.

 

During a discussion with Business Standard banking editor Manojit Saha, Anuj Tyagi, managing director and chief executive officer (CEO) of HDFC Ergo, highlighted the evolution of the insurance distribution framework in recent years. “The distribution framework has evolved over the past few years, offering companies different tools,” he noted.

 

This progress has enabled insurance providers to customise products and target specific regions, potentially increasing market penetration. Tyagi said, “Insurance companies are now able to tailor specific products and focus on particular areas of specific states. This will show green shoots in terms of penetration.”

 

 

He expressed optimism that the groundwork is set for a significant rise in insurance penetration. “The groundwork is done; soon, insurance penetration will increase,” he added. Tyagi also mentioned the role of the “Bima Trinity” in enhancing accessibility. “The Bima Trinity should help reduce costs, but the main objective is to increase insurance accessibility,” he said.

 

Animesh Das, managing director and CEO of Acko General Insurance, shared his vision for comprehensive general insurance coverage across India by 2047. “The goal is to cover the entire population with general insurance by 2047,” he stated. Das emphasised the importance of technology, not just for efficiency but as a core element in the industry’s growth. “Technology or digital distribution is often seen as a tool for efficiency, but it needs to be at the core as well,” he said.

 

He noted the need to adapt to the digital preferences of the new generation, especially as decision-makers at home increasingly belong to the internet-native generation. “Most decision-makers at home will be people born after the internet era. The insurance industry is catching up,” Das said.

 

Das underscored the importance of a robust digital framework, stating, “In the insurance ecosystem, ease and convenience of doing business, along with product approval timelines, are fundamental. Additionally, building a sharp digital framework to engage with the emerging audience is crucial.”

 

On making health insurance more affordable and accessible in India, Das stressed the importance of efficient distribution to reduce costs, enabling insurers to offer more benefits to customers. “Distribution efficiency is key to cost savings, which enhances product affordability by allowing insurers to pass on more benefits to consumers,” he explained.

 

Das highlighted that customised, data-driven products also contribute to affordability by addressing users’ needs. “You need to create products that are convenient for users — both at the time of purchase and during claims,” he said. He added that precise underwriting can help reduce unnecessary costs, ultimately benefiting genuine customers.

 

Further discussing affordability, Anup Rau, managing director and CEO of Future Generali India, noted that India already has some of the lowest health insurance premiums globally. “Health insurance premiums in India are among the lowest in the world,” he said, adding that affordability could still improve.

 

Rau suggested that government intervention, particularly through tax relief, could make a significant impact. “I would prefer GST relief to make health insurance more affordable,” he said.

 

On value-added services in the general insurance sector, Das advocated offering such services similar to those in banking. “Value-added services make a lot of sense. There are good examples in banking, like credit card lounge access, built on top of financial products,” he said, suggesting similar add-ons could enhance the health insurance experience.

 

Tyagi highlighted the potential of value-added services to transform general insurance from a “push” product to a “pull” product. “Insurance companies can shift from being a push product to a pull product with value-added services,” he explained.

 

Tyagi pointed out the unique nature of insurance, where neither sellers nor buyers prefer to use it. “Insurance is a unique product where neither the seller nor buyer wants to experience it,” he said.

 

“For instance, neither party wishes for the insured car to break down,” he noted, adding that this reality underscores the importance of additional benefits that add value beyond claims.