Future Generali’s general insurance sector has registered a
robust growth of 20 percent in the financial year 2012-13.The private insurer
has done business of Rs 1,126 crore in the non-life segment this year by
selling over 8 lakh policies across the nation, said KG Krishnamoorthy Rao, MD
& CEO of Future Generali General Insurance.
Recently, IRDA has announced 20 percent hike in motor insurance premium which has been implemented from April 1, 2013. Do you think the proposed hike is enough for the revival of motor insurance business?
No, we are not satisfied with the hike as the gap between premium receipts and claims are widening day by day. The difference between these two factors is almost 100 percent. General Insurance Council has recommended premium hike of 80 percent in motor insurance; however, IRDA has not approved it due to various constraints. By and large, losses will continue to exist in motor insurance segment.
Few days back, a private news website reported alleged money laundering by some banks through insurance route. Do you think that the insurance products could be misused for the alleged financial transactions?
The possibility of money laundering is comparatively very less in general insurance sector as compared to life insurance products as the latter gives returns on maturity. General Insurance deals with the risk cover in case of harm, damage or accident. There is no maturity in general insurance, hence, the chances of money laundering is negligible.
How has been the response from your corporate insurance and rural insurance products?
We have registered growth of 20-25 percent in commercial insurance segment while rural insurance is still in its nascent phase. However, rural insurance has greater potential in the agri-based economy like India. Here, more than 55 percent people are engaged in agriculture and its allied activities to earn their livelihood. To cover rural risk is just to cover agriculture risk. We are looking to expand this segment by creating rural awareness and developing better distribution channel.
What are the plans for expansion of general insurance business?
We are opening branches in small towns to increase our penetration and geographical presence. We are empaneling new cadres of agents to cater the people even in rural areas. For this, we have tied up with the some non-profit organizations for developing business in rural areas.
What are the challenges you have seen in this financial year?
Pricing is the major cause of concern this year. Undercutting premium rates and unfair market competitions have adversely affected the outlook towards the insurance business. However, IRDA has given some relief in motor insurance segment by hiking 20 percent but this is not enough. Despite all this, the general insurance companies have registered growth of 19 percent in premium payment.
Lack of appropriate talent in the insurance sector has also been constraining the growth of industry. The need of an hour is to introduce new talent to accelerate growth in the insurance industry.
What are your expectations with the coming months?
We are very hopeful of economic revival in the coming months. We are having lots of expectations with the government and regulator of some positive measures for the growth of insurance sector. For this, it is important that government and regulator should work in coordination.