Generali Central Insurance Targets Growth

“That’s really a question for the shareholders rather than the CEO. We already have a very stable joint venture partnership between Generali Insurance and the Central Bank of India. From a broader industry perspective, India does not have as many insurers as several other large markets. Dubai, Singapore and South Africa have three to four times the number of insurers that we do. One challenge is that many companies already have joint venture partnerships in place. In India, it is difficult to find suitable partners who understand the sector, are willing to deploy patient capital and are not keen on listing immediately. Most of the large industrial conglomerates have already been taken. The remaining set of potential partners often include players primarily interested in listing gains, which is not what many legacy insurers are looking for. Under these circumstances, it is very difficult for an overseas insurer to enter the Indian market. In that sense, the move to allow 100% FDI is godsend for those who want to come into India, as it allows them to enter without having to worry about these constraints.”

“Renewals have become more attractive because customers are suddenly paying less than last year. As far as new demand is concerned, there is some increase, but there is no clear visibility yet. It is difficult to quantify or say whether this (GST rate cut) has had a meaningful, tangible impact on new business. There is definitely an impact on renewals, and logically that should be the case—if something becomes cheaper, demand improves. On the other hand, group insurance is a much more complicated issue. Many players are being very cautious on pricing because over the last 18 months, group health loss ratios across the industry have gone up significantly. Several companies have been writing a lot of wholesale business—be it crop or group health—at very competitive pricing and low commissions to manage their expense and scale requirements. Some of this has now become unsustainable, and as a result, insurers are stepping back from group health business.”