Page 34 - The Insurance Times January 2022

government has stated that the objective of the amendment
is to increase public participation in these companies, it may
not be easy to make a public offer of the three unlisted
public-sector general insurance companies - National
Insurance, Oriental Insurance and United India Insurance.

This is because these companies are poorly run and have
weak financial metrics. Their actuarial skills are not in sync
with the competition. The performance of the three general
insurers has taken them to the brink of insolvency, with the
central government bailing them out in the recent past. The
government infused INR124.5bn ($1.7bn) in July last year in
these companies to keep them solvent.

They could need more funds this year as well. Still, the three
unlisted state-owned insurers hold around 25% share in the an IFSC Insurance Office (IIO) in GIFT City in Gandhinagar,
Indian general insurance market. Private General insurers Gujarat.
may be keen on these entities for their large client base and
branch network. Union Budget 2021 increased FDI limit in The Supreme Court has asked the government to consider
insurance from 49% to 74%. India's Insurance Regulator withdrawing the exemption from insurance granted to
(IRDAI) has announced the issuance, through Digilocker, of 150,000 buses owned by state road transport corporations
digital insurance policies by insurance firms. (SRTCs) because victims in accidents involving these buses
wait for years to receive compensation from the
The Economic Advisory Council has recommended increasing government-run corporations. A small but growing group
the retirement age saying life expectancy is expected to of insurers have withdrawn in full or partially their products
continue to increase due to better health infrastructure. The from web aggregators and online third-party brokers.
retirement age needs to be raised in a phased manner as
India is a young nation with a high working population. A delay of over two months by the central government to
According to data released by Help Age International, a appoint the new IRDAI chairman is hampering regulatory
global network of organisations working with and for older progress and causing business disruptions for India's
people, over 10% of India's total population (about 139m insurance sector amid the coronavirus pandemic. The
people) were aged over 60 in 2019. ongoing COVID-19 pandemic in India is likely to exacerbate
pressure on the country's non-life insurers' underwriting and
The proportion of elderly is expected to double to 19.5% by investment performance, leading AM Best to maintain its
2050 when one in 5 people is likely to be a senior citizen. negative outlook on this market segment.
Currently, Three out of four Indians retiring over the next
18 months lack adequate health insurance coverage but Xiaomi, a Chinese smartphone maker, is looking to provide
intend to increase coverage. According to S&P Global the full spectrum of financial services across insurance,
Market Intelligence data, India is the second-largest payments, and lending in India. Xiaomi has partnered with
insurance technology market in Asia-Pacific, accounting for ICICI Lombard to curate a health insurance product. This
35% of the US$ 3.66 billion insurtech-focused venture was piloted in July, and will continue to be offered, Xiaomi
investments made in the country. also has a cyber insurance offering, and more than 25,000
customers have been covered so far.
The scope of IoT in Indian insurance market continues to go
beyond telematics and customer risk assessment. Currently, "Going ahead, InsurTech is another proposition that Xiaomi
there are 110+ InsurTech start-ups operating in India. In is working on in a curated manner in partnerships. The other
February 2021, ICICI Lombard General Insurance, a non-life financial services will be offered in partnership with
insurance firm in the private sector, has been authorized by organisations like Axis Bank, IDFC Bank, Aditya Birla Finance,
the International Financial Services Centre (IFSC) to establish Stashfin, Money View, Early Salary and Credit Vidya. 40% of

34 The Insurance Times, January 2022