Merchants’ Chamber of Commerce & Industry (MCCI) organised the MCCI Insurance Conclave on the theme ‘Insurance for Family Businesses – Past, Present & Future’ on Friday, 26 April 2024 at 6 pm at The Park, Kolkata.
Shri Anand Singhi, Chief (Retail & Government Business), ICICI Lombard General Insurance Company addressed the audience as Guest of Honour. Shri Singhi said that IRDAI has allowed de-notification of wordings namely product de-tariff of motor and commercial lines of business. This will allow changes in the core policy wordings and provide an opportunity to simplify the clauses for customers.
The General Insurance (GI) industry is now a Rs 3 lakh crore market. GI penetration stands at 1% against the global average of 4%. Only about 5.4 crore Indians have Individual Health Insurance Policy. 85% of the 6.3 crore MSMEs in the country remain uninsured. Health and motor insurance dominate the GI industry landscape and health has emerged as the dominant segment constituting 37% of the industry with the motor segment growing at about 14.5% since FY22.
We live in an unpredictable world these days. There are prominent legitimate reasons to prepare ourselves for those unannounced curveballs. Coverage depending on the economic activity of the entity without underinsurance is vital. The protection gap leads to huge economic losses and has a direct negative impact on MSMEs. It takes little to protect the future. e.g., an asset valued at Rs 10 crore can be insured for just Rs 1 lakh premium.
Choice of full value declaration coupled with the right coverage will ensure full claim settlement from insurers. Lack of adequate cover will result in financial losses that will only be partially paid due to underinsurance. Insurance is a safety net that helps one bounce back when events throw a curveball. Also, insurance is a vital tool for the MSME sector to protect the value created, for generations to come, and to plan for the future with more certainty.
The topic for the first Technical Session was ‘Lowest Premium, Maximum Claim’. Shri Rahul Agarwal, Chairman, Council on Insurance, MCCI was the moderator. The panelists were Shri Anand Singhi, Smt. Kasturi Sengupta, General Manager, National Insurance Company, and Shri Dulal Mitra, Chairman, Ideal Insurance.
The session discussed the reasons why claims get delayed due to underinsurance and also exclusions. More transparency in policy structure will lead to fewer claims getting rejected. If one buys the right policy, without being over-smart, the claim should not get rejected.
Shri Anand Singhi said that we should think about the right premium and right protection. He added that it is important to ensure that the consumer is buying the right policy. The Consumer Information Sheet in health policies states what is included and excluded. If insurers create the right policy, then there will be no challenges in the claims stage. Shri Singhi also said that policy coverage should be right and coverage should protect against the relevant risk. Coverage against risk should be best in class.
Smt. Kasturi Sengupta said that since 24 January 2024, IRDAI has implemented 100% cashless in the TPA network. One can walk into any hospital and claim a cashless facility. IRDAI has established a 24 x 7 Helpline for senior citizens. IRDAI has also decided to include AYUSH as a part of health coverage. The Consumer Information Sheet in health policies is meant to reduce misinterpretation. IRDAI has also started a National Claims Exchange and all health claims will be processed at the exchange. In recent times, the National Insurance Company has been underwriting many policies for cybercrime, covering both first-party and third-party liability.
Shri Dulal Mitra said that minimum premium still means that we should consider all risks and take complete cover. He added that claims processing on the retail side has improved a lot but there are still problems on the commercial side.
Shri Rahul Agarwal summed up and said that governance of policy structure is important and consumers should get the right coverage.
The topic for the second Technical Session was ‘Evolving Role of Insurance in Family Business’. The speaker was Dr. Parimal Merchant, Director, Global Family Managed Business Program, SP Jain School of Global Management. Dr. Merchant said that a good supportive family and excellent relationships is the best insurance policy. However, the way healthcare costs are going up, helping a family member financially to meet the hospitalization expenses is unviable.
Shri Namit Bajoria, President, MCCI delivered the Welcome Address. He said that India’s Insurance industry is one of the premium sectors experiencing positive growth. In 2022, India was ranked the 10th largest insurance market in the world with a premium volume of USD 131 billion with a 1.9% share in global insurance premiums and is projected to become the 6th largest by the year 2032.
Reports indicate that the Health Insurance segment has emerged as the primary growth driver, breaching the Rs. 1 trillion mark in premiums and achieving a growth of 20.2% in FY24. Motor insurance occupying 50% of the pie in the non-life insurance industry, excluding health has recorded a steady growth rate of 12.9% in FY24 and exceeded Rs. 90,000 crores.
Industry experts project that the insurance sector would grow by 13%-15% in the medium term, primarily driven by health and motor insurance segments.
Shri Rahul Agarwal, Chairman, Council on Insurance, MCCI delivered the Theme Address. He said that families and businesses go bankrupt due to a lack of insurance. There are 70 insurance companies in India and the market size is about USD 250 billion and growing rapidly vis-a-vis 6,000 insurance companies in the USA.
The Session concluded with a hearty Vote of Thanks proposed by Shri Rahul Agarwal.
