For non-life insurers, year 2020 is going to be year of digital

Rakesh Jain

It has been an exciting 2019 for the general insurance sector in India. Our country, being one of the most under-penetrated markets globally (at 0.97 percent in FY19 as per Swiss Re sigma report), presents a massive opportunity for the general insurance industry. We estimate an average 15-18 percent growth year-on-year for the next decade or two. This year we saw a major regulatory push to ease access and strengthen innovation.

• Regulatory Sandbox: IRDAI’s regulatory Sandbox is one of the most significant steps towards innovation and maturity for the industry. A secured test environment to execute new ideas will lead to improved coverage, eased accessibility, faster processing and lesser rejection of claims for consumers.


• Motor Vehicles Act (2019): Enforced since September 1 this year, the new Motor Vehicles Act has introduced hikes in traffic violation penalties, mandatory third-party liability and helmet cover. This has led to a stark growth (~38 percent) rise as of September 2019 for the motor portfolio as well as positive changes in driving behaviour and compliance.


• Natural calamities: Climate change did and will continue to affect India with unpredictable natural calamities. In light of the rise of floods incidents in several states, home and property insurance have the opportunity to offer robust financial protection and resilience for the masses. General awareness however, remains low as evidenced by the Kerala floods, where out of 70,000 impacted homes, only 5 percent were insured.


• Healthcare coverage: The National Health Protection Mission (PMJAY - Ayushman Bharat) was a momentous announcement for the health insurance sector during Union Budget (2018-19). This move is set to enable a health infrastructure push across the country and continue to expand coverage for the deprived population. As of October 2019, under the scheme, 50 lakh beneficiaries have availed free secondary and tertiary treatment costing about Rs 8,000 crore in 32 states and Union Territories. There are 9 hospital admissions every minute using Pradhan Mantri Jan Arogya Yojana. The numbers are a clear evidence of progress and growth in the health care and insurance sector in India.


• New age risks: Persistent cyber threats continue to rise in India. The growth of digitization will create new forms of security risks to critical infrastructure.


• Conversational commerce: By 2020, every three in four policy purchases is estimated to be influenced by digital channels. This has led to a paradigm shift for insurers who are now addressing the needs of the tech-savvy generation with 24X7 AI-chatbots


• Emergence of New Age products: The year saw a slew of innovative products in the form of bite-sized insurance policies also called as Sachet products with low premiums. This new model will continue to see innovations in pricing flexibility, value for money, convenience and awareness for customers in the long run.

With all eyes towards 2020, the future of General Insurance industry looks extremely promising aided with favourable regulatory framework, deeper personalisation of products and growing digital customer-centricity.

The writer is ED & CEO, Reliance General Insurance