Covid helping SBI General gain share in health


Posted September 26, 2020 by SBIGeneral

The Covid-19 pandemic has transformed the way people look at life and how they protect themselves and their families. SBI General Insurance managing director PC Kandpal tells Ashwin Manikandan on how the industry is likely to evolve.

 
The Covid-19 pandemic has transformed the way people look at life and how they protect themselves and their families. SBI General Insurance managing director PC Kandpal tells Ashwin Manikandan on how the industry is likely to evolve. Edited excerpts:

The pandemic has been particularly bad for general insurers. How has that changed the way you look at the world?
The coronavirus pandemic was truly a Black Swan event. However, the awareness of health insurance increased during this time. All who had policies and contracted the virus got treated at hospitals — and the urgency of people to get insured was also through positive word of mouth. Till last month we saw over 1.64 lakh claims registered with the industry. There is definitely an impact.

What is your assessment of the cost and claims?
The cost of treatment also has a wide range because the line of treatment is not very clear. Most of our claims were in tier-II cities and beyond, and the ticket size was lower than metros. Additionally, a few hospital networks are charging more than others. It will impact the profitability in this particular line of business, but there are lessons to be learnt for companies and the regulators.

There are lessons. But how does it change the pricing?
This is a call which will be taken by individual health insurers. Some companies may choose to reprice when they are filing their products in October. The regulators have also allowed an annual repricing for Covid-19 specific products keeping in mind the changing risk dynamic. From October, some insurers could hike prices. These include comprehensive covers. However, regulators also want to ensure affordability in prices ..The price rise if it happens won’t be steep — only marginal.

Does the widespread contraction of Covid-19 mean growth would come from health?
Currently, most of the premium is coming from metros and the key segments are motor, crop and fire. Health is now also slowly gaining share. Going forward we are looking at tier-II and beyond cities to increase our cover. In a village of 5,000 people, no policies are sold. If we can sell policies through bank tie-ups, that will be a good support for them. Our growth target is to reach beyond town with simple, affordable and easy to understand products.

Your current market share in the industry is about 3.5%. Where do you ideally like to be?
If you look at our growth rate of 33% over the last three years, we are growing at double the average growth of the insurance industry. Even in Q1 FY21, while the industry shrank (excluding crop) we grew by 15%. As of August, our growth was 21% against the industry’s 4%. We aspire to grow double the pace of the industry and we see ourselves among the top 3-4 general insurers in the country.

What has been the impact of the pandemic on motor which is the largest portfolio for most general insurance players?

In motor, we have seen an impact. During April and May, there were no sales. But I’m optimistic. During August there was 11% output growth. The pandemic will add to the increase in demand for passenger vehicles. However, there could be a slump in commercial vehicle sales. As far as the general insurance industry is concerned — motor may see some stress in premium growth. We feel there would be flat growth if not an increase.
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Issued By SBI General
Business Address Natraj" 301, Junction of Western Express Highway & Andheri Kurla - Road, Andheri (East) Mumbai - 400 069
Country India
Categories Accounting , Banking , Insurance
Tags health insurance , health insurance policy , health insurance quotes
Last Updated September 26, 2020