ICICI Lombard reported a revenue of Rs 144.88 billion in the financial year 2018-19. It clocked a net profit of Rs 10.49 billion during the period under review. Edited excerpts:
Q: What is your outlook for the General Insurance industry?
Gopal Balachandran: The growth of General Insurance industry is a key indicator of the overall health of the economy. It has grown at a Compounded Annual Growth Rate (CAGR) of 17 per cent over the last 18 years and the industry is expected to continue its commendable growth in years to come.
Demographic factors, such as growing middle class, young insurable population and the growing awareness of the need for protection, will support the growth of Indian general insurance.
India is at a favourable point in terms of rising per capita income and with the increase in purchasing power, the financial services such as general insurance are certain to grow.
Q: What gives you optimism about the industry’s future?
Gopal Balachandran Just to throw some statistics, India is the 4th largest insurance market in Asia and the 15th largest globally. It is a significantly underpenetrated market with the premium as a percentage to the GDP being a meagre 0.97 per cent. From a non-life insurance density perspective, the per capital premium is a meagre $19, when compared with USA which stands at $2,672 for the same matrices.
This presents tremendous opportunities to grow, capitalise on the market conditions and make non-life insurance into a preferred product segment for the end consumers to ensure indemnification of large and medium scale losses.
The growth outlook for the general insurance sector, therefore, continues to be positive with the growth expectation being close to 2 to 2.5 times the GDP growth.
Q: What do the growth opportunities for ICICI Lombard look like? What’s the growth projections for FY20 and FY21?
Gopal Balachandran: As a Company our focus has always been on profitable growth and even in the future we would continue to grow our business with the same theme. In the medium to long term horizon, we expect that we will grow by about 15 per cent to 20 per cent.
We believe that in our preferred segments we have significant scope and potential to register a double digit growth year on year.
Economic growth prospects will lead to increased demand for asset accumulation and therefore risk mitigation measures. Being a leading player, these augur well for us as we are well positioned to harness the growth opportunity given our customer centric focus, technological prowess and innovation strength.
Q: What will be your major growth levers?
Gopal Balachandran: The SME insurance sector continues to be a core area of focus for us with the premium growth in the sector being over 25 per cent and we believe that this sector will continue to grow and prospect.
With a continual effort to grow wellness solutions in the health insurance space and offer effective risk management solutions, ICICI Lombard is well positioned and would look to consolidate its standing in the retail health insurance segment.
The company continues its focus on offering value added services and be regarded as a preferred partner to the customers, for offering risk management solutions.
We proactively advise customers on the right set of risk mitigation practices to be adopted and thereby be a business partner, by way of working with customers in preventing of business impacting loss events/incidents.
With new regulations anticipated under the motor insurance sector, the segment is certain to witness a good growth cycle and ICICI Lombard will look to leverage on the favourable proposed legislations. Building insurance awareness also continues to be a key factor, which ICICI Lombard is committed to.
Q: What are your expectations from the Union Budget 2020-21?
Gopal Balachandran: The government has always been pro insurance and I am sure that in the upcoming budget, the government will announce measures that will boost the penetration of insurance in the country.
Extending insurance protection to all segments of society along with appropriate incentives to taxpayers for premium payments made, would go a long way in boosting the growth of this sector.
Insurance is a must for inclusive development of the country and to balance growth with risk.
Home insurance may require a fillip from the government for enhanced penetration of the product among the end consumers.
Similarly, if tax exemption limits can be enhanced for health insurance premiums paid, the same would a long way in allowing customers better protection of their health by opting for higher sum insured policies.
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ICICI Lombard eying 15-20% growth rate in medium to long-term: CFO, Gopal Balachandran have 1009 words, post on cfo.economictimes.indiatimes.com at January 30, 2020. This is cached page on Health Breaking News. If you want remove this page, please contact us.