A promising outlook for 2023
What does 2023 hold for the Indian insurance industry? Industry captains are confident that it promises to be a transformative year. The momentum created in 2022 will not only see it through but also ensure it does a lot better.
By Anoop Khanna
The Insurance Act 1938 and the Insurance Regulatory and Development Authority of India Act 1999 are currently awaiting amendments by the Indian parliament. The amendments are likely to alter the basic framework on which the industry has grown over the last two decades and give a new perspective for the overall development of the sector.
Composite licences will benefit the industry
The introduction of composite licences will not only result in expanding the three business lines (life, health and non-life) for insurers, it may also increase mergers and acquisitions activity in the industry and bring consolidation.
For consumers, this reform will see a majority of insurers become a one-stop solution for a variety of financial services. It may also give industry players an opportunity to leverage their existing distribution architecture.
The year 2023 should see the advent of niche insurers and also captives following the removal of the statutory requirement of INR1bn ($12.2m) for insurers and INR2bn for reinsurers.
Distribution will drive growth
Reliance General Insurance managing director and CEO Rakesh Jain said, “A deeper and diverse distribution model will be the main growth driver for the non-life insurance industry in 2023.
“Complementary partnerships and digital alliances in distribution will augment deeper penetration into the hinterland of the country and take us many steps closer to government’s goal of ‘insurance for all’.”
Mr Jain said, “Additionally, tie-ups with multiple partners (fintech/InsurTech) will be crucial to aid seamless and near instant services to customers.”
Regulatory innovations
An array of innovations catalysed by IRDAI will enable insurers to diversify offerings with customised risk solutions and sachet products thereby address evolving customer requirements.
Shriram Life Insurance MD and CEO Casparus Kromhout said, "Though some macroeconomic factors seem to have impacted recent growth and cannot be ignored, the overall outlook for the industry seems very positive."
Mr Kromhout said, “The industry has picked up well post-pandemic and this trend is expected to continue in 2023.”
Pivotal role of technology
Edelweiss General Insurance managing director and CEO Shanai Ghosh told news agency IANS, "While technology will continue to play a pivotal role, the industry needs to deploy digital solutions to collectively work towards improving penetration of insurance in the country by adapting to customer requirements."
She said insurers will need to strike a balance between digital adoption and human intervention that will not only help simplify the entire customer experience from search to purchase to claims to customer service, it will also lead to building positive experiences for customers.
Aegon Life Insurance managing director and CEO Satishwar B said the amendments made to the regulatory sandbox will enable insurers to try out and optimise new products more easily. He said, “Initiatives like ‘use and file’ will be especially beneficial to digital insurers to meet consumer demands through innovation swiftly.”
New technologies like AI and fully-digital processes will further open up opportunities in underinsured segments – like self-employed individuals. Buying will become simpler and more intuitive and digital underwriting will allow insurers to scale rapidly.
The year 2023 will see more and better avenues of digital distribution emerge with more InsurTech partnerships in order to make insurance more accessible.
The focus in the years to come should be on building on existing strengths to realise the collective dream of ensuring ‘Insurance for all by 2047’ - a dream that seems achievable with every passing day.
ICICI Lombard General Insurance managing director and CEO Bhargav Dasgupta said, “The year 2023, driven by reforms and the burgeoning ecosystem of digital health, emergence of digital intermediaries across the entire customer lifecycle, increased insurance awareness and participation of small and medium enterprises sector will accelerate adoption of insurance across all segments.”