- The first and foremost thing you should do is to register a complaint with your insurance company to get your grievance addressed.
- Every insurance company has a Grievance Redressal Officer (GRO). If your complaint is not addressed at the local level, you can escalate it to the GRO of the insurance company.
- You should approach the IRDAI only after you’ve gone through your insurance company’s grievance redressal channel.
We know insurance has huge potential in India. With insurance penetration extremely low in comparison to similar countries along with rapid digital adoption, growth can be very fast and exciting. However, what are the exact risks and opportunities in this space? To understand this better we have a very special guest on board.
We are very happy to welcome Sagar Sanyal for this edition of People of Insurance. Sagar is the director of technical services at Zoom insurance brokers. He is also a consultant and a professional trainer. He has spent more than 30 years in the insurance industry. Safe to say he has several years of knowledge that will give us an inside view and a better understanding of the current insurance scenario.
People of insurance is a series by Assurekit where we invite experts and people from the insurance space to share insights, opinions and stories from the people of the insurance industry. This is whether they have years of experience in the space like today’s interviewee or have just joined the insurance industry.
How is the insurance landscape today?
It is pretty well, it’s one of the few that haven’t shrunk during this last two years. During the imposed lockdown insurers and brokers were working from home – face to face interaction which is so essential in the financial industries had been hampered. The personal touch of being in front of a client was missing but continuity had been maintained. Work had not stopped. The current scenario is a bit different and the things are slowly returning to normal with the brokers and insurers resuming the face to face meetings with clients, notwithstanding the continuation of virtual meetings, too.
From the client side, we did see reduced sum insurance but that was for a short while. With the industries limping back to normal, the insurance demand also continues. Major renewals happened in their usual manner. So, in all, it’s in a good place. There are fights to fight but if the last two years have shown us anything it is that the industry is resilient in a lot of senses.
What would be the emerging risks and insurance?
The challenges that I mention below are more opportunities in the insurance space rather than just threats.
There are a lot of new things happening here and it’s a very exciting time in the insurance space. So, let me break down each one for you.
1) Cyber threats are a big concern.
Corporates with multifold growth have been affected by this. It is not something new that has come up in the last 2-3 years but has become increasingly popular during the last two years. These couple of years in the pandemic have increased the risks corporates face. New sectors are falling victim to hackers e.g. manufacturing industries that were not the targets earlier have shown sharp growth in ransomware / DDOS attacks. New threats like supply chain cyber-attacks affecting large numbers in the network are growing concerns
This is why brokers and underwriters in the industry must go in-depth to understand the risks these sectors face from cybercrimes. The wordings need to be dynamic in nature and flexible enough to accommodate new threats.
A simple example of this is email phishing. A CEO gets an email from his company’s finance department, except it is not his finance department and the email id is slightly different. The CEO sends the money to the account. This is called fraudulent impersonation. However, something so simple is a reality today.
Today people don’t have the answer for voice phishing attacks. Hackers can have a real-life physical impact and cause damages by taking control of the manufacturing unit. They can cause fire damage or worse……the policy wordings need innovation. However, at the same time with growing threats, the corporate clients should be ready to pay the technical premium.
Globally the premium for cyber liability as well as deductibles are increasing and the impact is felt in India too
2) Business interruption
During the pandemic, we understood that uncertainty and businesses coming to a halt can become a reality. Business enterprises faced closures during the pandemic primarily due to imposed lockdowns and the workers/staff being denied from entering their workplaces.
The insurance policies do not cover such eventualities and a number of litigations in the US against the insurers, are on for such compensations. Most of the cases have gone against the plaintiff whereas insurers have been asked to pay in a few (where the wordings were ambiguous )
We can already see Indians demanding a cover like this too. However, the solution for this is simply not there yet.
3) Trade credits
Businesses that deal with foreign countries always have the fear if they will be paid their dues. Political distress, protracted default of buyers and several other situations can lead to loss of income for goods that have been shipped/ sold already.
During the pandemic, the buyer default increased considerably and trade credit insurers faced huge underwriting losses
Businesses today feel the growing need for trade credit insurance. While trade credits aren’t new the need has increased due to the pandemic. Not being insured is a threat to the corporate world.
While the market is improving now, insurers have certainly shown a lesser appetite for similar risks in recent times. Premium increases and more stringent underwriting have been the norms.
Note: We also had a conversation with Akshay Bhardwaj to understand trade credits. Check it out here.
4) Developing new products
It is absolutely critical for the Indian insurers to file new products or amend the existing ones to keep pace with the innovative demands of the clients e.g. Title insurance which provides the real estate buyers protection against any financial loss due to defective titles/ property documents is in the nascent stage. More insurers should come forward to file such products.
Solar developers often enquire about products that can cover their losses for reduced performance due to the lack of solar radiation. Such weather linked products are popular in Europe but not so much in India. With the help of the reinsurers, Indian underwriters need to revamp the products which were there in the market during recent times, to suit the requirements and demands of corporates.
5) Trained manpower
Investing in trained manpower will really take the industry ahead. Today, a lot of the fresh recruits, don’t have formal education or training. There are in total only 3-4 institutions that provide that kind of training and the demand is much higher.
When I joined I had 6 months of induction training. Similar induction training is lacking now.
With a wider range of more trained people in the industry, not only will the penetration increase but the industry can grow much further.
Having conducted advanced insurance training for the entire insurance ecosystem in India as well as other countries, I always felt that the corporate should invest more in L&D …the return on these investments are immense in the form of higher quality product as well as employees retention.
6) Move towards rural sectors
We all know that insurance hasn’t penetrated India to the level we had anticipated. There are very few branches in rural areas and not enough private companies want to set up branches there. Therefore, training manpower from the areas can truly help growth in such areas.
What do you think the industry will look like after the pandemic is over?
I can only see growth post the pandemic. The motor insurance industry is already making a comeback and picking up speed. The risks will remain, so insurance will remain. Slowly more and more people will realise that no one can afford to remain uninsured. There are several pockets that new insurance products can be innovated in, for example, flood insurance is a necessity. New innovations are just a start, with further partnership and business development the insurance industry is sure to bloom.
Thank you so much Sagar for cutting down the fat and giving us a clear inside view of the industry. We wonder which threats will be used as opportunities to grow and be better. These coming years will be very interesting to watch.
Once again thank you Sagar for taking the time and sharing your outlook with us. Sagar Sanyal also does corporate training in insurance, so if you are interested to connect with him you can reach out to his Linkedin.