Business in the first quarter could be affected in select vehicle segments
In an interview, Sanjeev Mantri, Executive Director, ICICI Lombard, the largest private general insurance company, shares his views on recent developments in the insurance industry. He said crop insurance is expected to become the third-largest segment in the industry after motor and health insurance. Excerpts:
As the financial year draws to a close, how would you evaluate the year for the general insurance industry?
The general Insurance industry has witnessed robust growth of 31% in the fiscal year 2017 [Apr – Feb data]. This has been driven by the introduction of the Pradhan Mantri Fasal Bima Yojana (PMFBY), the government’s flagship crop insurance program as well as a rise in other segments.
With PMFBY, crop insurance is expected to beSimilarly, the expectedcome the third largest segment in the industry after motor and health insurance. With a healthy GDP growth and rising per capita income levels, we believe that the industry should continue on its strong growth trajectory in the coming years.
Do you foresee any challenges in this financial year, with recent developments in the health and motor insurance space?
In the motor space, we could see some impact of the changeover from BS-III to BS-IV in the form of production constraints, thereby affecting business in the first quarter for select vehicle segments i.e. two wheelers, CVs.
Similarly, the expected implementation of GST may apply downward pressure on vehicle prices,which will reflect in the car insurance online policies.
Whether this translates to lower cost of spare parts and hence claims cost is to be seen, even as premiums get influenced by new vehicle prices.
On the health insurance side, the cap on pricing of implants beyond stents would be beneficial to consumers, especially considering that medical inflation growth has been high (above 12% in 2016 as per industry reports). However, the manifestation of this price capping in terms of overall cost of procedures would be known only in time.
What kind of premium growth has ICICI Lombard witnessed in the various products?
The year has been positive for us. As a company, we stayed ahead of the industry growth curve, having registered over 33% growth (9M – FY17) in terms of Gross Direct Premium Income (GDPI). In segments such as motor OD, we registered the second-highest accretion in the industry. On the corporate side as well, we registered robust growth across vertical lines.
The National Pharmaceutical Pricing Authority recently announced capping of stent prices. How would this impact patients?
The price capping on life-saving coronary stents has led to a drop in stent prices by about 85%. This will bring a major relief to patients who will now be able to avail treatment at much lesser cost.
Do you foresee any such breakthrough developments or announcements in the near future?
We could see more such announcements pertaining to reduction in prices of other implants. The approach would primarily focus on making medical procedures affordable for the common man by reducing the cost of such standardised implant devices.
Heath insurance has always focused on urban areas. Any expectations from the IRDAI that will help in changing this?
The regulator has been introducing revisions in health regulations in the recent past and this will definitely lead to increase in health insurance penetration in urban as well as rural areas. The recently announced measures pertaining to allowing insurers to launch pilot products will facilitate product innovation. Insurers can now file group products based on approval by its Product Management Committee.
This will enable them to customise coverage and better meet customer needs. Further, they can offer premium discounts for healthy habits. These measures are customer centric and would go a long way in increasing health insurance penetration.
We expect the authority to continue to introduce more such consumer friendly measures that will aid the long-term development of the health insurance industry.
ICICI Lombard’s recent focus has been wellness; how have you intertwined this theme in your offerings?
We have been revamping our product portfolio and have introduced innovative and relevant ‘wellness’ focused benefits in our health insurance covers.
Today, we offer benefits such as gym & yoga reimbursements, nutrition consultation and sports & fitness therapy in our product range.
Under our ‘Manage and Track Your health’ and ‘Affinity to Wellness’ programmes, there are certain activities which the customer can perform to earn wellness points.
(Source- The Hindu)