What do you think of the insurance regulator, Irdai’s proposal to increase third party premium rates for passenger cars and two-wheelers?
We have to follow the guidelines stipulated by the regulator and we don’t really have a say, but only time will decide if these tariffs will be able to support the high losses. More importantly, third party court decisions have multiplied and are not what they were 4 or 5 years ago. So, we’ll have to see how that pans out in due course.
What was the intention behind the launch of your recent product “Gift of Health”?
We firmly believe in innovation to bring the right insurance solutions to the customer. In accordance with the guidelines of the Irdai sandbox, insurers have the possibility to offer new products. ‘Gift of Health’ is a program designed to ensure the health of those who matter to you. You can gift it to your housekeeper, friends, family and even members of an NGO. It has the options to cover hospital charges, or accidental expenses, or both.
Given the under-penetration of health insurance and people’s reluctance to buy it for themselves, do you think they will gift it to others?
We recently launched a pet insurance product, which has been extremely well received. If we can think so much about the pet, why not about its blood relations? Furthermore, post-pandemic penetration has increased, particularly in health insurance.
Do you think there is a big enough market for pet insurance in the country?
There are more than 3 million pets in the country, and among them, 80-85% are dogs, and their maintenance cost is quite high. Insurance, anyway, is a product being pushed in India and we will have to raise awareness that a pet is also a member of the family. If you can insure your own life and that of your parents, why not that of another member of your family? It’s largely a metro product and we’ll start with metros and tier 1 cities, before moving on to tier 2/3 cities.
How has the pandemic changed Future Generali’s health insurance?
India ranks among the three countries most affected by the pandemic. This health crisis has resulted in very high medical inflation, and more and more people consider health insurance to be as essential as other survival necessities. In a country where penetration was less than 4% in the pre-Covid era, this is a major shift in the market. In addition to basic health insurance products, consumers are also looking for all-inclusive plans, including wellness benefits and mental health support.
Growing awareness of people’s insurance needs has also led to better products and faster claims settlement, shorter waiting periods and policies with no sub-limits. Payment of premiums is now possible in monthly instalments and cashless procedures are increasingly being introduced. We are seeing a phenomenal shift in approach, especially towards millennials. For example, they are constantly targeted at products via the digital mode that are innovative and offer benefits such as support for OPD and home care that do not require hospitalization.
More importantly, someone who was covered for Rs 1 lakh is now asking for Rs 3 lakh cover, and those with Rs 3 lakh cover are asking for Rs 5 lakh cover due to high medical inflation. Another change is that before the pandemic, people were happy with the coverage provided by the employer. Now, the young population keeps changing jobs, and hence they want independent and substantial health insurance of at least Rs 15-20 lakh.
How have underwriting rules changed due to the pandemic?
There is the adoption of new techniques such as tele-underwriting. Gone are the days when people had to fill out forms. Everything is now done by phone, email or app. To cope with the situation caused by the pandemic, digitization and other processes such as electronic proposal forms have been introduced. The awareness and approach to wellness has received considerable attention. As a result, more and more people now view fitness and wellness programs as necessary for survival and improving the quality of life.
People with pre-existing mental illnesses struggle to get coverage. Will these products undergo changes such as reducing the waiting period for pre-existing conditions, as is the case with basic health plans?
I don’t see why it shouldn’t, but it will come at a price and people should be prepared to pay that price. It’s a niche product and it will take time. People don’t realize that depression, not cancer or Covid, is the number one killer. We hope that they will start buying the product at an early age so that they won’t find it difficult to do so after contracting the disease.
Has the web become the first distribution channel after the Covid or do the traditional channels still retain their hold?
Up to 70% of policies are now sold online. Our field sales staff are also moving around with tabs and I wouldn’t be surprised if in the future we are 90% digital in almost every major city.
Will Future Group’s exit plan impact the company’s operations?
There will be no impact as the company was run by local management anyway. Both Future and Generali were shareholders and management had full freedom to run the business. We are one of the few profitable insurers in the country. What may change is the constitution of the board, with more representation from Generali since they will have a 24% stake, and independent directors as required by law. There will be no change in the operation of the company.
What are the company’s future plans?
We will focus on profitable growth. It will not be growth without profitability or only profitability without growth. We are in the top 10 now and in the future we would like to be in the top 5 or top 3. We are investing a lot in improving support and IT infrastructure. We also want to maintain our renewal rate in the commercial line of business, ie business, close to 96%, and retail close to 70%. Then we would like to grow with them and our new customers.