After more than seven months of being without a chairman, the Insurance Regulatory and Development Authority of India (IRDAI) will have a new chairman appointed. A large number of outdated laws require reconsideration, according to top industry executives who declined to be mentioned by IANS in their statements. Among the predictions made by senior officials of the Indian general insurance industry for 2022 are a new chairman for the sectoral regulator, a review of existing regulations, consolidation among players, a focus on profitability, larger companies reaping the benefits of technology investments, and an increase in the third-party motor insurance policy.
In addition to pointing out that the general insurance sector is price sensitive, the participants’ economies of scale will be another benefit that may be used to encourage mergers and acquisitions in the industry (M&A). In August 2020, ICICI Lombard announced that it will acquire the general insurance business of Bharti Axa General Insurance through a demerger from Bharti Axa General Insurance. The final clearance for the transaction was obtained by the IRDAI in September 2021, and ICICI Lombard expects to realise synergy advantages over the next two years.
As a result of the investments made in digital transformation and the development of the distribution channel, large general insurers such as ICICI Lombard are projected to achieve greater operational efficiency. When it comes to faster growth rates in 2022, Balanchandran says it would be fascinating to observe how the digital insurance businesses — those that solely offer policies online — do in the market. “Digital innovation, corporate governance, and greater public disclosures are also gaining important from a regulatory standpoint,” Balachandran said of the regulatory changes that the sector anticipates.
When it comes to the year 2021, Jain describes it as “difficult” due to the effects of Covid-19 as well as various natural disasters. Due to the fact that the motor insurance vertical accounts for about 40% of the total general insurance business, with a significant percentage of it coming from third party risk cover, insurers are not enthused about any changes that might result in decreased premiums and investment revenue. However, according to a survey conducted by the Insurance Information Bureau of India (IIB), general insurers are not experiencing significant losses at this time.
The lockdown during the first wave, in reality, resulted in a significant decrease in third-party auto insurance claims for the insurers. Despite the fact that there was already a growing awareness and desire for income solutions before 2020, the pandemic has increased the urgency of safeguarding one’s income and establishing another source of revenue. Because of this, life insurers will focus their efforts on developing products and services that answer client concerns about income fulfilment and other goal-related criteria such as retirement.