What is your opinion on 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 have much to say, but only time will decide if these rates will be able to take care of the high losses. More importantly, third party court rulings have skyrocketed and are no longer what they used to be 4-5 years ago. So, we will have to see how it is resolved in due time.
What was the intention behind the launch of your recent product ‘Gift of Health’?
We firmly believe in innovation to offer the right insurance solutions for the client. Under the Irdai sandbox guidelines, insurers have the opportunity to introduce new products. ‘Gift of Health’ is a scheme designed to ensure the health of those you care about. You can give it as a gift to your domestic help, friends, family, even members of NGOs. You have the options to cover hospital costs, accidental expenses, or both.
Given the lack of penetration of health insurance and people’s reluctance to buy it for themselves, do you think they will give it away to others?
We have recently launched a pet insurance product, which has received a tremendous response. If one can think so much about the pet, why not its blood relatives? Also, after the pandemic, penetration has increased, especially 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 of these, 80-85% are dogs, and their maintenance cost is quite high. Insurance, however, is a push product in India and we will have to create 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 the life of another member of your family? It is very much a metro product and we will start with metro areas and tier 1 cities, before moving on to tier 2/3 cities.
How has the pandemic changed health insurance for Future Generali?
India is 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 as essential as other necessities to survive. In a country where penetration was below 4% in pre-Covid times, this is a major change in the market. In addition to basic health insurance products, consumers are also looking for all-inclusive plans that include 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 sublimits. Premium payments are now possible in monthly installments, and cashless procedures are being implemented more and more. We are seeing a phenomenal shift in focus, particularly towards millennials. For example, they are constantly being targeted for products through the digital mode that are innovative and offer benefits such as OPD coverage and home health care that does not require hospitalization.
More importantly, someone who was covered by 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 so they want a hefty independent health insurance of no less than Rs 15-20 lakh.
How have subscription rules changed due to the pandemic?
There is adoption of new techniques such as tele-subscription. Gone are the days of asking people to fill out forms. Now everything is done via phone, mail or app. To deal with the situation caused by the pandemic, digitization and other processes such as electronic proposal forms were introduced. Awareness and focus towards wellness gained significant attention. As a result, fitness and wellness programs are seen by more and more people as necessary to survive and improve quality of life.
People with pre-existing mental illnesses find it difficult to get coverage. Will these products undergo changes such as the reduction of the grace period due to pre-existing illnesses, as is the case with basic health plans?
I don’t see why this shouldn’t do it, but it will come at a price and people should be willing to pay that price. It is 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 start buying the product at a young age so that they do not have difficulties to do so after contracting the disease.
Has online become the main distribution channel after Covid or do traditional channels still retain their dominance?
Up to 70% of policies are now sold online. Our field sales staff are also moving with tabs and I wouldn’t be surprised if in the future we are 90% digital in almost all major cities.
Will the exit plan of the Future group have an impact on the company’s operations?
There will be no impact because the company was run by local management anyway. Future and Generali were shareholders, and the management had complete freedom to run the company. 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 according to the law. There will be no change in the operation of the company.
What are the future plans of the company?
We will focus on profitable growth. It will not be growth without profitability or just 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 heavily in improving IT infrastructure and support. We would also like to maintain our renewal rate in the commercial line of business, that is, corporate business, close to 96%, and retail close to 70%. So we would like to grow with them and our new customers.
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