No disruption, just evolution
GIC Re chairman-cum-managing director Alice Vaidyan does not see any disruption ahead for the reinsurance industry.
Mrs Vaidyan, in her special welcome address at the inaugural ceremony of 12th India Rendezvous, said, “Overall, one could say there is no disruption, only consistent evolution in the industry but, nevertheless, it does not mean that the challenges thrown up are any less formidable.”
“The reinsurance industry saw major disruption following the 9/11 events in 2001 where governmental solutions had to bridge the void created by withdrawal of commercial insurance in regard to terrorism coverage.”
Mrs Vaidyan said, “Alternative capital experimented with the reinsurance sector through CAT bonds, sidecars and industry loss warranties - but those experiments apparently have met with only partial success.”
General insurance in India is at an inflection point
New India Assurance chairman-cum-managing director Atul Sahai said, “General insurance in India has come a long way, yet India remains one of the most under-penetrated insurance markets.”
He said, “Going ahead with the ‘push’ being provided by the government insurance schemes such as the prime minister’s crop insurance scheme and Ayushman Bharat (National Health Protection Mission), there is tremendous growth possible, especially with an industry-friendly regulator.”
SCOR Global P&C Reinsurance CEO Jean-Paul Conoscente said, “Three major global drivers are generating significant changes with strong implications for the (re)insurance sector.”
“Demography and climate, economy and industry, macro-economy and finance are the three major drivers of change and the areas they are impacting are sustainable development and energy transition; hubs, networks and connectivity and the intangible economy,” he said.
“The common theme in all these is resilience … for insurers, reinsurers and brokers.”
Role of government in enabling risk transfer
The first technical presentation of the day, by Swiss Re India branch CEO G Raju, focused on the role of government in public/private partnerships in enabling risk transfer.
Mr Raju said, “We need to step-up engagement with governments and public institutions to highlight the utility of risk transfer in mitigating the financial impact of natural catastrophes on government budgets, and to build public/private partnerships to strengthen fiscal resilience.”
He said, “Creditworthiness also improves with risk transfer as ratings agencies have now started evaluating exposures to natural disasters and impact on financing and refinancing costs.”
Crop insurance in India has challenges
ACE Insurance Brokers director Anil Arora highlighted the critical role of PMFBY for the Indian economy.
Putting aside media reports of profiteering by insurance companies from the scheme, he explained that insurers take on risk to protect farmers from the vagaries of nature and the impact of crop losses.
Essay competition winners feted
Mrs Vaidyan also gave away the certificates to the winners of the ‘Energising insurance in India’ essay competition.