Face to Face

'India has tremendous potential in Insurance'

What is the overall Scenario in the insurance market in India?

At present GIC and its subsidiaries function through a vast countrywide network, which is spread across the length and breadth of the country. But, now the Indian Insurance Industry is going through a process of change. Particularly before opening up the insurance sector, India is sorting out the regulatory issues. Insurance Regulatory Authority already formulate the rules and regulations and they are giving licences to the private parties for setting up of new insurance companies. They starts operating by the end of the 2000 AD. Now Growing at an annual average rate of 14%, GIC's business is satisfactorily increasing and which is highest in the world.

Which are the thrust areas for insurance sector in India?

The potential for Indian insurance is very high. And looking at our own profile of products, today we have a product for every segment of society and for every age group. We have products which address the differing needs of children, women, farmers, aged persons and healthcare. Today these products have a large market in the country and some of these products have tremendous potential.Now we are giving a special emphasis on personal line insurance, i.e. the insurance needs of the common man and at individual level like, personal accident, travel health, house holder's insurance, professional liability insurance etc. we have tremendous potentiality of development of insurance in semi-urban, rural and agricultural sector. Since, 1973 several improvement is going on in the general insurance, but vast resources, are lying untapped. Such types of insurance are mainly cattle and livestock insurance, poultry, fisheries, insurance, agricultural crop, plantation, horticulture insurance, Farmer's personal accident, Hut's and glooming implements insurance etc.

In what way is the Indian Insurance Industry different from that in the developed countries?

Indian Insurance Industry is progressing quite satisfactorily. We have lot of potentiality which has to be tapped in General Insurance. Our regular penetration is about 0.60% of India's GDP which is quite low compared to South East Asian countries and also the developed countries. In the developed countries it ranges between 2-8% But we have to improve substantially and this improvement is to develop the various insurance segments in India. The main difficulties in development of personal line and semi-urban and rural insurance is our inadequate marketing channels. Our present marketing missionary is mainly tune to urban business. Besides, the remuneration fault progressing of semi-urban, rural and personal line business is not sufficiently attractive for the marketing force like agent and other intermediaries. We are seriously addressing this issue.

What about National Insurance Company Limited's recent activities, specially in Eastern region?

In the Eastern region National Insurance Company Limited have leading market share, i.e. 36%. We have a very good network and head office being situated in Calcutta. For that reason, Eastern region is benefited. We have also leading market share in Northern region. Our growth rate has been highest for the last five years. In this context, I like to mention that our average growth rate is 14%. We have the lead share in some prestigious projects, like, Haldia Petrochemicals Limited.

What is your vision for the future?

We have taken several initiatives. One is the segmentational initiative for the marketing. For larger projects, techno-marketing sales and for personal insurance direct-agents branches, training of agents and man power development are the main thrust areas. Second one is customer awareness. Besides, that seminars, stress on publicity, monitoring of customers grievances and public complaints and above all computerisation. Country-wide computerisation in the recent past has made the task of policy-holders' servicing easier and rapid. At the same time we are giving emphasis on maximising the growth rate and controlling the management expenses. Third one is the product innovation. In case of product, we have demand is less because lack of awareness for adequate insurance cover in India with insuring public.

What are the problems faced by the Indian Insurance Sector?

These are -

Lack of awareness for insurance needs
Lack of penetration due to inadequate marketing/delivery system
Total computerisation still in the process of implementation.
Sophisticated covers do not have adequate demands because of general attitude to insurance in India.

Where does Indian insurance sector stand compared to international insurance sector?

Technologically, Indian insurance sector is quiet comparable with the international sector our vast resource of skilled and technical man power, huge market potentiality, technical know-how -all are comparable with the international sector. Besides lacking in process of computerisation and high pricing (premium rate) are quiet comparable.

What are your views on the future of the Indian insurance market?

The General insurance industry in India has all the inherent strength and capabilities comparable with the advanced insurance markets in the overseas and it is expected that under the watchful eyes of Insurance Regulatory Authority the future prospects will be bright and Indian insurance industry both in life and non-life will be a great force to reckon in the global operation of insurance industry.

You have been in the industry for a long time. What do you think of the insurance sector reforms everyone is talking about?

Is it in the right direction?
It's a purely government decision but when it is opened nationalised sector will be ready to face the challenge.

What is the strategy your company will be adopting to overcome the stiff competition?

The present insurance and national sector has adequate financial strength, organisational network, expertise and human resource to meet the challenge of competition which will be arise due to opening of the insurance sector. Never the less they will be restructuring them selves and taking difficulties and they way have to attend better business flow and render better customer service.
Further computerisation and implementation of Information Technology are in rapid Progress, which will give the proto connectivity throughout the country by 2001.