ICICI Lombard General Insurance Company, the largest private insurer in the country, sees strong growth in the health and auto insurance segments in the backdrop of the COVID-19 pandemic, which has heightened the need for health insurance and demand for personal mobility as people avoid public transport at least in the near term.
“As private mobility becomes the preferred mode of transport over shared mobility, motor insurance should witness a fillip. When it comes to health, we see it as a multi-year growth phenomenon,” Sanjeev Mantri, executive director of ICICI Lombard, told THE WEEK.
Non-life insurance penetration in India is low at 0.97 per cent of GDP, compared with a global average of 2.8 per cent. Even from an Asia perspective, it is lower compared to the average penetration of 1.85 per cent.
This year due to the pandemic, health insurance, in particular, has seen a huge boost. According to the General Insurance Council, health insurance accounted for 29.2 per cent of the premiums collected by non-life insurance firms in the April-October period, compared with 25.8 per cent a year ago. Motor insurance, retained the largest share in overall premiums collected, but saw its share dip to 31.3 per cent in the same period from 35.3 per cent a year ago.
ICICI Lombard General Insurance saw its gross direct premium income underwritten rise 2.44 per cent to Rs 7,994 crore in the same period, according to the GI Council data.
“Fear does play a role in the minds of people and the current pandemic has influenced many to give increased importance to health insurance. Further, high associated medical cost, etc have been among the factors leading to more consumers signing up for health insurance this year,” said Mantri.
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The company reported a net profit of Rs 814 crore in the first half of the year, up 32 per cent from a year ago. Earlier this week, it launched a revamped portfolio of health insurance policies, with some of the newly introduced coverage benefits including cashless OPD services, donor expenses, worldwide cover and super no claim bonus, among other things.
There is also an unlimited reset benefit, where policyholders can reset up to 100 per cent of the base sum insured unlimited times in a policy year for an un-related ailment.
Earlier in October, it partnered a prepaid card platform Freepaycard, to launch bite-size insurance products, targeting the younger generation.
“We believe that the millennials and Gen Z prefer insurance solutions that are easily accessible, simple to use and most importantly affordable. The launch of the bite-sized health insurance is a step in this direction,” said Mantri.
ICICI Lombard has also introduced products such as ‘pay as you use’ policies that allow customers to pay motor insurance depending on their vehicle usage.
ICICI Lombard is in the midst of acquiring the general insurance business of rival Bharti AXA General Insurance. The Insurance Regulatory and Development Authority recently gave its in-principle approval for the deal. The Competition Commission of India has also already approved the deal.
“The proposed transaction is expected to result in value creation for all stakeholders through meaningful revenue and operational synergies. Further, policyholders should benefit from an enhanced product suite and deeper customer connect touch points,” said Mantri.
