We have launched 8 products in current financial year: Rajiv Kumar, Universal Sompo General Insurance
India has 33 General Insurance Companies, at present, with a majority of them belonging to the private sector. Post 2001, with opening of the sector for private companies, the insurance segment has witnessed rapid growth, higher geographical penetration, consumer friendly products and growth of multiple selling channels that increased competitiveness and transformed the insurance market. The General Insurance industry, today, offers extensive range of products targeting commercial, personal, industrial, liability as well as agricultural and crop product offerings.
Yet, insurance penetration in India is still quite low at 0.7% as compared to world average of 2.8%. The insurance density for India also stands very low at US$ 12 compared to World Insurance density of US$ 276.
Replying to Newsbarons, Rajiv Kumar, MD & CEO, Universal Sompo General Insurance informs “Our growth target for current financial year is 30% on diversified business portfolio on healthy growth in Motor and Retail Health segments.”
NB: In the current situation, what are the opportunities and challenges?
Rajiv Kumar: The insurance market has a considerable amount of latent potential. Growing Indian economy have tremendous opportunity for insurance in the coming decades and factors like increase in per capita income and demographic factors such as growing middle income class and young insurable population are expected to boost demand for insurance in future years.
Increase in awareness along with initiatives made by government would be additive to general insurance growth in next years to come. Against the backdrop of rising income levels, insurers will be able to expand product lines to cater to the demand for more customized and sophisticated risk solutions in future years.
New avenues (like CROP), new distribution channels (like Common services centers (CSCs), POS (point of sales) & Web aggregators) are expected to provide new opportunities and market segment for insurers in future years.
However despite the huge potential of Indian insurance market there also exists some challenges like lack of awareness of insurance as a financial product as in India still millions of people are not aware about financial benefits of insurance and they are drawn towards the investment benefits of insurance.
From industry prospects, the exiting challenges like continued underwriting losses and high loss ratio of long tailed motor liability are still a concern among Indian insurers. With increased digitization in urban areas, new product demand like cyber, brand and terrorism risk are posing challenges in assessing new kind of risk to Indian insurers.
NB: What will be your focus area going forward?
Rajiv Kumar: We will be focusing towards maintaining its momentum of growth and to keep increasing our market share.
The company will also ensure to improve its overall profitability and would like to ensure a positive underwriting profit over next few years. With focused approach to bring in efficiency in claim and other infrastructural management, the company will be working to approach for a profitable combined ratio.
Besides, the company is also working extensively towards creating and developing efficiencies in customer services, claim management system to benefit our customer.
NB: What are your new product launches?
Rajiv Kumar: We have launched 8 products in current financial year including 7 products for CSC Channels like Individual Health Insurance policy, Senior Health Insurance Policy, Hospital Cash Insurance and Complete Healthcare Insurance. Our other products include Domestic Travel Insurance and Products under Government Schemes like Unified Package Insurance Scheme & Pradhan Mantri Fasal Bima Yojana.
In previous financial year, FY2016-17, general insurance industry had registered premium growth of 32.43% which was primarily backed by registered growth of 288% via Crop Insurance on enhanced focus under the Government Scheme Pradhan Mantri Fasal Bima Yojana (PMFBY) for rural India.
NB: What steps should the regulator take to boost the sector?
Rajiv Kumar: The overall size of the Indian insurance market is restricted by a general lack of awareness of the benefits of insurance amongst the low income segments of the population. Even though the recently introduced Pradhan Mantri Suraksha Bima Yojana and Pradhan MantriFasal Bima Yojana has increased the insurance coverage in India, but further advancement toward awareness creation is required from the regulator.
In present scenario, however the regulator has generated supply-side interest in insurance via regulations but significant effort in creating similar demand side interest for insurance products is also needed. The regulator has taken various steps to propel Indian Insurance industry through various progressive regulations and the general insurance sector is rapidly moving towards international standards of free (risk-based) market pricing and new/innovative product offerings along with new regulations.
NB: Brief us about the launch of a Mobile Application for its PoS distribution channel?
Rajiv Kumar: The company has introduced a mobility platform & solution which will give the benefit of policy issuance at a single instance without the need to set-up a branch infrastructure or operations. The new PoS channel will utilize mobile based application; whose users will be company appointed PoS personnel’s and they will solicit and service new business & customers through the mobile application.
The company will be extending a set of IRDAI approved pre-underwritten products to customers for Motor, Health, and Critical Illness initially. The Company has envisioned the appointment of 8000 POS personnel’s to solicit and extend insurance benefits to uninsured section of the society.
NB: What was the growth in premiums? What is your growth target for next fiscal?
Rajiv Kumar: We have closed FY 17 with a premium of Rs 1287.23 Cr with an exceptional growth of 42.42% which is much better than the industry average. This organic growth has come from the well diversified business segments of the company in Motor at 24.34%, Crop Insurance at 161.05% and Miscellaneous line of business at 54.54%. Being one of the empanelled companies for Pradhan Mantri Fasal Bima Yojana (PMFBY), the Crop Insurance business had provided the required impetus in the Company’s growth in terms of premium as well as customer base.
Our growth target for current financial year is 30% on diversified business portfolio on healthy growth in Motor and Retail Health segments ably supported by Crop & Other Miscellaneous segments.
NB: What are your hiring plans?
Rajiv Kumar: The Company boasts of highly competitive and goal-driven employees who are aligned with the company’s objective of profitable growth. Future plan on hiring is aligned with the growth trajectory of the Company and we will always strive for individuals who present themselves as fit for the organization’s culture.