Anup Rau, Managing Director and CEO of Future Generali India Insurance Company, has called for the deregulation of motor third-party (TP) insurance, citing high loss ratios and stagnant premiums as barriers to the growth of the insurance sector. In an interview with Financial Express, Rau highlighted that while motor insurance continues to be a significant part of their business, regulatory changes and price revisions are necessary to improve third-party insurance penetration in India.
Rau noted that a large portion of vehicles in certain regions remain uninsured, with some areas facing loss ratios as high as 150-200%, making it unfeasible for insurers to cover these risks without revisiting pricing structures. “It has been over four years since the last rate increase for motor TP insurance,” he said. While claims were low during the pandemic due to fewer vehicles on the road, they have now surged, making the current pricing model unsustainable.
Rau believes that price deregulation would encourage better competition among the more than 25 general insurers in the market, ultimately leading to fairer pricing for all stakeholders, including transporters and fleet operators. “It’s not an oligopoly or duopoly. Deregulation would ensure better price discovery, benefiting customers in the long run,” Rau added.
Regulatory Changes Boosting Insurance Penetration
Rau also discussed how recent regulatory changes are helping to increase insurance penetration in smaller towns. One key initiative requires each insurer to cover specific states and panchayats. For example, Future Generali has been assigned Sikkim, where they have sold over 10,000 policies. The introduction of products like Bima Vistaar, which combines life and non-life insurance, along with streamlined operational processes like product filings and approvals, has also boosted accessibility.
These regulatory efforts are designed to make insurance more affordable and accessible, particularly in rural areas. “The regulator understands that for the industry to grow, there needs to be a framework that allows insurers to respond swiftly to market changes,” Rau said.
Growth and Future Outlook
Rau highlighted that Future Generali closed the last financial year with a gross written premium (GWP) of ₹5,000 crore and is on track to reach ₹6,000 crore in FY25. About 50-60% of their business is retail, with motor insurance making up two-thirds of that. However, while motor insurance remains their largest segment, the health insurance portfolio is expected to grow by over 50-60%, driven by increasing awareness post-Covid.
While motor insurance growth has slowed at the industry level, due to stagnant premiums and market conditions, the health insurance segment has seen rapid expansion. “Employers are taking health coverage more seriously, and much of the growth is being driven by group health policies,” Rau noted.
Non-Motor Insurance Growth
In non-motor insurance, Future Generali has seen a decline in its crop insurance portfolio, which previously accounted for 20-25% of its topline, but has now reduced to around 7% due to softened rates. However, travel insurance has emerged as a major growth area, with a significant portion of direct business coming in. Other lines such as fire and marine insurance are also performing well.
