21-08-2020
Tapan Singhel of Bajaj Allianz General Insurance reveals why Indians shy away from buying insurance
Insurance AlertssTapan Singhel of Bajaj Allianz General Insurance reveals why Indians shy away from buying insurance
Business may be dwindling across sectors, but insurance in health and life is poised to grow despite the current uncertainty. The continued threat from COVID-19 has led to increased concerns, leading many people to buy health and term life insurance, a recent PwC report indicates.
Titled COVID-19: Impact on the Indian Insurance Industry, the report says insurers believe the fear around coronavirus has pushed people to buy health insurance, with inquiries surging by about 30-40 percent. But Tapan Singhel, Managing Director and CEO of Bajaj Allianz General Insurance, believes that insuring oneself is not so common among Indians.
On an average, the expenses of a COVID-19 patient go up to Rs 2 lakh. This should ideally lead to several health insurance claims, but that “is not the case”. In April, the growth was negative with several insurance players reporting a "degrowth". According to the Insurance Regulatory Development Authority of India (IRSAI), in April, new business premium sdeclined 32.6 percent to Rs 6,728 crore as against Rs 9,928 crore for the same period last year. The number picked up only in May.
“Look at an insurance product. For the price and the protection, it is unbelievable. Insurance companies are paying, and the balance sheet is the evidence. But the interesting part is: why are people not queuing up to buy a product that is priced so well and offers amazing benefits?”
Government backing needed
Having worked in the insurance space for over 15 years, Tapan considers himself a “hardcore insurer”. He says he has observed that insurance has the highest penetration in countries where it is mandatory by law. In India, this is why automobile insurance is the norm - it is mandatory to have third party cover.
Tapan believes India’s insurance industry has been offering good policies and products for different situations, and adds that insurance companies are often perceived as agents but are “just the intermediaries”. Tapan feels more partnerships – especially with the government - are required to reach and cover more people, and that a combination of strategies can make it easier to provide cover to more people.
“Insurance is critical, which is why a partnership between government and insurance companies is vital. Both need to work together to benefit citizens. At the backend, there should be some support or provision from the government if things go out of control,” he says.
What does the future hold?
Insurance penetration in India is low, but is slowly growing. As per a report by India Brand Equity Foundation (IBEF), the overall insurance penetration (premiums as per cent of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001.
The number of insurance companies are few in India, especially when compared to many foreign countries. About 50-60 insurance companies are operational in the country as of now.
The market share of private sector companies in the non-life insurance market rose from 15 percent in FY04 to 56 per cent in FY21 (till April 2020). In the life insurance segment, private players had a market share of 31.3 per cent in new business in FY20.
Tapan, however, is bullish on the future.
Tapan’s advice to individuals seeking insurance advice is simple: “Get at least four covers, including health, cyber, personal accident, and home.”
Source: Your Story
