Mumbai : Health has a potential to grow faster than motor insurance segment, said New India Assurance (NIA), CMD, G Srinivasan. This is largely due the price correction that has been taking place, he added.
While talking to The Free Press Journal, after the announcement of NIA’s IPO, he said, “Health insurance policies are voluntary. So it has a potential to grow much faster. However, motor insurance is based on the sales of vehicle sales. So, I think health can grow faster than motor insurance.” Both health and motor insurance segment has been growing at 20 per cent.
He claimed that only 10 per cent of the people take commercial health insurance policy. “There is a need for lot of innovations in that segment. We need more products; and better tie up with hospitals and better way to reach out to the customers.”
Yet another segment—crop insurance— has got an impetus from the Indian government. “The government has set-up a team for allocation to increase the reach. They want it (crop insurance) to grow by 40-50 per cent in two years’ time. We as insurers will certainly play a very important role. Here we would also need reinsurer’s capacity—GIC Re and global reinsurers— in order to achieve the target.”
Despite state-run GIC Re trading below the share price, NIA seems very optimistic. “It (GIC Re) is a reinsurer and we are a general insurance company. Other insurance players have done well. The insurance industry has matured and it will show positive results in times to come,” claimed S N Rajeshwari, NIA’s GM and CFO. The company which will hit the capital market, hopes to raise around Rs 10,000 crore. About 80 per cent of the money raised will go to the government and rest will be with NIA. The company’s initial public offer will open on November 1, 2017 and close on November 3, 2017. It will be priced at Rs 770- 800 per equity share.
Talking about reinsurers and the way it will shape the crop insurance segment, Srinivasan said, “As Indian market is growing, capacity (from reinsurers) is something that will be positive. This should help not just in crop but in any another line of business. So, international re insurers really need time to settle but they will play an important role in the market.” He also revealed that right now the company has seen about 8 per cent growth in this segment and the company’s growth depends on the capacity it can source from the reinsurers.
Srinivasan also stated that new lines of businesses like liability business insurance, cyber liability insurance and other insurances that haven’t penetrated like shop-keepers, home-owners etc, will also see growth.