Mr. K.G. Krishnamoorthy Rao, Managing Director and Chief Executive Officer, Future Generali India Insurance Company Limited has recently shared his views on insurance as well as commercialization benefits to India. His perspective about the same is stated below.
Year 2015 has been an eventful year for India. The range of policy initiatives taken by the Government and the regulators have led to renewed optimism about the future prospects of the Indian economy. On the backdrop of such progressive regulatory landscape, the India growth story looks better and brighter now. The stable currency and the positive macro environment will support GDP growth of the country which will have a direct impact on the growth of the general insurance sector.
The series of natural calamities this year has made people aware of the significance of general insurance products. The earthquake at Nepal or the floods at Chennai clearly brings forth the bitter truth of the magnitude of damage that natural calamities can have on our lives, however financially stable we are. People are gradually realising that the right insurance covers protecting all their assets is a must. Especially, there is an increasing trend of people registering for health insurance. This is mostly due to tremendous inflation in healthcare costs which has made it almost impossible for a person to undergo any major medical treatment without support from an insurer.
On the commercial side as well, we see a silver lining. With our PM’s ‘Make in India’ effort and other reforms, we see an upsurge in the manufacturing sector which is proving to be a boon for the growth of Property and Marine Cargo insurance. Also the stalled infrastructure projects would finally kick off in 2016, thereby boosting the engineering insurance sector as well. Additionally the environment concerns and related actions will largely impact the growth of the auto industry and auto insurance space.
I feel that the biggest challenge for General Insurance sector is profitability. This is chiefly because of unhealthy price wars that exists in almost all product segments. In order to curb this, I feel that the sector will have to look at the viability of having products at these pricing levels and take appropriate steps in correcting these prices. This will ensure long term stability of the sector and also ensure sustained quality servicing to our customers. For only a healthy insurance sector can offer adequate protection to the customers.
