Page 24 - Insurance Times December 2022

basing on understanding of the user experience and private sector insurers in terms of their constitution and
requirements. Ideas such as usage-based insurance and pay- operations in the next few years. And, consolidation among
as-you-go will have to be tried with so as to offer tailored private sector insurers through mergers and acquisitions is
insurance policies meeting growing customer expectations. a continuous activity. International Financial Centre (GIFT)
New thinking and technical competencies in underwriting has been set up and yet another insurance ecosystem is
and pricing of risks will be required. There will be need for getting developed there (IFSCA). A unified regulator for all
collaborations and integrating with business partners. It is financial services has been established to regulate entities.
crucial to understand that sharing goods, services and even Indian insurance sector is on the cusp of a new era with a
skills adds to efficiency and reduce costs. new narrative of progress.

The sharing economy offers access to things that might not As operations face extraordinary disruptions, working out
be practical to own or obtain. While human touch remains how to respond and chart the path ahead would be a
important and agents/ brokers still play their role effectively, challenge that would test the leadership of organisations.
tech enabled services will also have to be made available. Without question, Indian insurance industry today is
As against full and permanent employment and working different, the growth is linked with disruptive changes,
from office, alternatives that have emerged especially during existing leaders are making adjustments to their business
Covid 19 pandemic such as outsourcing and co-working, models and new players with substantially different business
remote working could be explored. models are asserting their place in the marketplace.

Insurance reach in India is still low compared to world
Challenges and actions for making
average. Insurance penetration (premiums as % of GDP)
stood at 4.2% in year 2021. In non-life insurance business, organisations future ready-
India ranks 15th in the world with less than 1% share in
What could the new Indian insurance sector look like? Who
global non-life insurance market. The plan and process of
will win and who will stumble in the new operational
'insuring the nation' is a long one. In life insurance business,
environment? The die is yet to be cast.
India ranks 10th in the world with just about 3% share in
Legacy establishments have the advantage of being
global life insurance. The insurance regulator in India carries
seen as trusted and time tested organisations. LIC still
the word 'development' in its name, and, regulatory
holds more than 60% of the market share and non-life
authority has not only been aggressively pushing the agenda
PSUs together hold just about 50%. Private insurers and
of 'insurance for all' but also facilitating the journey by active
the new tech enabled insurance operators are gaining
participation.
prominence in India's insurance landscape basing on the
strength of product offerings, convenience and service
Regulator has offered sandbox for creative ideas and
efficiencies.
actions, eased the process of file and use, considering
relaxation in capital requirements. Insurance Information People in India have been putting faith in public sector
Bureau is activated to be the single point for entire organizations, be it banking or insurance. However, the
insurance industry data. The general perception and PSU and private insurers are governed by same
attitude towards insurance is fast changing due to the legislation and regulation. This offers a degree of
unprecedented pandemic that made Indian population think comfort to the customers and private sector insures
of increasing need for effective risk protection through have been putting up an impressive performance and
insurance. fast establishing themselves in Indian insurance market.
Moreover, many of them are promoted by reputed
Challenges in the transformation industrial and banking groups.
process- Agents and brokers have been the main business sources
for PSU and big private sector insurers for customer
Globally, insurance business is transforming, and, things
engagement through face to face personal
cannot be different for India. Indian consumers have a
relationships. Pandemic has boosted direct, internet
wider choice in selecting their provider, either the century
and app-based sales due to the compulsion of social
old public insurer or decade old private sector companies
distancing. This would make PSUs and legacy insurers
or the newly setup tech-enabled private insurance firms.
to gear up and create alternate channels.
With Government action of PSU disinvestment, in terms of
organisational set up, they will be coming closer to large Regulator is considering shifting the industry to risk-
The Insurance Times December 2022 21