Despite reduced economic growth, the insurance sector has grown at a healthy 9.7% in 2020-21 with the growth of life insurance at 11.2% and non-life segment at 5.2%, said Subhash C Khuntia, Chairman, IRDAI. Khuntia is set to retire from the position of Chairman.
In his letter to insurance companies, Khuntia shared three trends that will shape the future of the Indian insurance industry. Let us look at them:
- Demography of the country with predominant young population is likely to persist for several years. These individuals can be potential customers for the insurance industry
- Potential of high economic growth would improve affordability of insurance policies
- Relatively low level of insurance penetration provides a huge opportunity for growth. The industry should leverage technology to bring in more policyholders from small cities and towns
In addition, he advised life insurers that they should develop cost effective micro insurance policies for rural population, farmers, women, MSME, the poor and the marginalised.
He recommended that the industry should enhance trust of policyholders in insurance by improving claim settlement experience and increase engagement with them.
He said, “All of us are fortunate to be part of this process at this point of inflection. All the stakeholders need to work together to create awareness about need for protection and for higher level of customer engagement throughout the insurance life cycle for enhanced customer satisfaction. Use of new distribution channels and omni-channels will be pervasive. Insurers need to be agile to respond to the fast-changing needs of the customers. Regulatory sandbox provides an opportunity to pilot such innovative products and services.”