A promising outlook for 2023

What does 2023 hold for the Indian insurance industry? Industry captains are confident that it promises to be a transformative year. The momentum created in 2022 will not only see it through but also ensure it does a lot better.

By Anoop Khanna

The Insurance Act 1938 and the Insurance Regulatory and Development Authority of India Act 1999 are currently awaiting amendments by the Indian parliament. The amendments are likely to alter the basic framework on which the industry has grown over the last two decades and give a new perspective for the overall development of the sector.

Composite licences will benefit the industry

The introduction of composite licences will not only result in expanding the three business lines (life, health and non-life) for insurers, it may also increase mergers and acquisitions activity in the industry and bring consolidation.

For consumers, this reform will see a majority of insurers become a one-stop solution for a variety of financial services. It may also give industry players an opportunity to leverage their existing distribution architecture.

The year 2023 should see the advent of niche insurers and also captives following the removal of the statutory requirement of INR1bn ($12.2m) for insurers and INR2bn for reinsurers.

Distribution will drive growth

Reliance General Insurance managing director and CEO Rakesh Jain said, “A deeper and diverse distribution model will be the main growth driver for the non-life insurance industry in 2023.

“Complementary partnerships and digital alliances in distribution will augment deeper penetration into the hinterland of the country and take us many steps closer to government’s goal of ‘insurance for all’.”

Mr Jain said, “Additionally, tie-ups with multiple partners (fintech/InsurTech) will be crucial to aid seamless and near instant services to customers.”

Regulatory innovations

An array of innovations catalysed by IRDAI will enable insurers to diversify offerings with customised risk solutions and sachet products thereby address evolving customer requirements.

Shriram Life Insurance MD and CEO Casparus Kromhout said, "Though some macroeconomic factors seem to have impacted recent growth and cannot be ignored, the overall outlook for the industry seems very positive."

Mr Kromhout said, “The industry has picked up well post-pandemic and this trend is expected to continue in 2023.”

Pivotal role of technology

Edelweiss General Insurance managing director and CEO Shanai Ghosh told news agency IANS, "While technology will continue to play a pivotal role, the industry needs to deploy digital solutions to collectively work towards improving penetration of insurance in the country by adapting to customer requirements."

She said insurers will need to strike a balance between digital adoption and human intervention that will not only help simplify the entire customer experience from search to purchase to claims to customer service, it will also lead to building positive experiences for customers.

Aegon Life Insurance managing director and CEO Satishwar B said the amendments made to the regulatory sandbox will enable insurers to try out and optimise new products more easily. He said, “Initiatives like ‘use and file’ will be especially beneficial to digital insurers to meet consumer demands through innovation swiftly.”

New technologies like AI and fully-digital processes will further open up opportunities in underinsured segments – like self-employed individuals. Buying will become simpler and more intuitive and digital underwriting will allow insurers to scale rapidly.

The year 2023 will see more and better avenues of digital distribution emerge with more InsurTech partnerships in order to make insurance more accessible.

The focus in the years to come should be on building on existing strengths to realise the collective dream of ensuring ‘Insurance for all by 2047’ - a dream that seems achievable with every passing day.

ICICI Lombard General Insurance managing director and CEO Bhargav Dasgupta said, “The year 2023, driven by reforms and the burgeoning ecosystem of digital health, emergence of digital intermediaries across the entire customer lifecycle, increased insurance awareness and participation of small and medium enterprises sector will accelerate adoption of insurance across all segments.”

A prosperous and egalitarian India is waiting in the wings

Every New Year brings forth hopes and aspirations to millions around the world and, as an industry, we look forward to a bright and fruitful 2023.

By Jimmy John

The Indian economy continues to maintain a high growth trajectory and is among the fastest growing in the world. The insurance sector is also witnessing a positive momentum, backed by a number of recent regulatory initiatives. The IRDAI has set growth targets for the insurance sector, with a view to enhance insurance density and penetration and also meeting the government’s objectives of ensuring 100% insurance cover for all Indians by 2047.

With the growth rate for the Indian economy projected at 7% for FY23, the future of the Indian insurance industry looks promising in 2023. The government has lined up huge investments in infrastructure and health that will generate opportunities for insurers and reinsurers in the market.

With increased economic activity resulting from post-COVID recovery initiatives, major improvement is expected in sectors like manufacturing, trade, hotels, transport, real estate and finance including insurance. Demographic factors, such as a large and young insurable population, a growing and vibrant middle class and increased awareness of the need for protection and retirement planning will also support the growth in the market.

In the midst of all the geopolitical turmoil and economic crisis around the world, India has been seen as a bright spot on the global landscape. The country is well and truly on the path of transformation – socially, culturally, economically and technologically. Moreover, with a growing population having high disposable incomes, technological advancement and vast untapped potential, the country is set to be an economic superpower by 2050.

The world’s fastest growing major economy is poised on the threshold of a bright future. With renewed thrust by the government towards self-reliance and financial inclusion through digitalisation, the insurance sector is set to act both as a catalyst and a beneficiary.

We welcome you to the new and vibrant India, the land of bountiful opportunities.