'The demand for health insurance is fine'

'The retail industry is still growing in double digits.'

Tapan Singhel, managing director and chief executive officer Bajaj Allianz General Insurance, in an interview with Business Standard's Aathira Varier and Subrata Panda in Mumbai, talks about challenges facing the non-life insurance industry and his vision for its future direction.

Following Allianz's decision to move out of the partnership, how has things changed for the company?

We have seen many movements in the industry before, and they've had no impact. We are one of the largest insurance companies in India, and such changes do not affect our operations.

We have a customer base of over 150 million, and a vast distribution network.

This has all been built organically by our team. Our solvency ratio is among the highest; we don't even require additional capital.

There will be changes on the Board, but for now, we are awaiting necessary approvals.

What is the reason behind the slowdown in growth in the non-life insurance industry?

The single-digit growth (in premiums) we are looking at currently is the impact of the 1/N accounting aspect (according to new norms, the long-term premium is reported on the basis of 1/N, where N is the number of days of the policy).

If you discount the accounting part, I think the growth is still double-digit.

General insurance is directly linked to the economy, with a lag. But when we see the slowdown, we don't look at the number of lives covered.

There is phenomenal growth in the number of lives covered. In 2001, the general insurance premium in India was just Rs 10,000 crore but today, it is touching Rs 3 trillion.

It has already moved up so much and that too with discounted prices.

The problem is we stick to that gross domestic product (GDP) penetration, which, in my view, just doesn't make sense for a country like India.

Motor third-party (TP) rates are not rising. Industry is saying it is not sustainable any more...

Free pricing happens for everything. Why not for motor TP? If you say you want to have a price increase based on loss ratios, then the industry will have to send representation to the government every year.

So it's not about price increase only. It's about segments where prices should go up, segments where prices should come down based on loss ratios.

That's the representation industry will naturally send every year.

When you don't have free pricing, you have an inefficient system.

Free pricing on motor TP will result in lower deaths on the road because your premiums will move according to your behaviour.

Growth in health insurance has normalised since Covid years...

Human memory is very short. The demand for health insurance is still fine and we still have a double-digit growth.

The retail industry is still growing in double digits. The growth can be better and it will be.

That is why I say that in India there should be a lot more insurance companies.

What is your view on GST in health insurance premium?

GST for senior citizens should be zero, because that is where the premium is the highest and they can't afford it.

For the rest, bring it to 12 per cent, because they can afford it, and the government should not also lose revenues.

A lot of life insurers are looking to get into health insurance. Are you concerned that this will eat into your business?

In a developed market where the penetration is very high, it is a concern. I have no concern. I have always said bring in more and that will bring competition.

We should just go for unified licenses; we should even open up distribution.

Agents should be allowed to do business for multiple companies.

Bring in more companies, open up distribution, let agents sell more and let us have open architecture.

What are the key focus areas for the company in the next few years?

The key focus area is the customer. Our aim is to be the best claim-paying company in the industry by reducing friction in the claims process.

We strive to grow our market share while ensuring the balance sheet remains strong to serve our customers effectively.

Minimising customer grievances is a priority, and we constantly work towards reducing them.

Our goal is to deliver the best possible claims experience. Do you want to see your company top the pecking order in private sector non-life insurers?

I want to be the best customer obsessed company and the best claim paying company. Market share doesn't matter because if you do the right thing, why will your market share not grow? For us, it has grown over all these years, consistently.

We should always do what is best for the customers, what is best for stakeholders and keep on doing that.

Feature Presentation: Aslam Hunani/Rediff.com