According to the senior officials of the Indian general insurance industry, a new chairman for the sectoral regulator, review of the existing regulations, consolidation of the players, focus on profitability, larger companies reaping the benefit of investments in technology, upward revision in the third party motor insurance policy are some of the 2022 forecasts. Officials also said it will be interesting to see how digital insurance companies will be able to scale up their business this year. It is going to be more than seven months since the Insurance Regulatory and Development Authority of India (IRDAI) is without a Chairman.
"It has been two decades since the opening up of the insurance industry. While during earlier phases the emphasis was on growth, the industry will move towards consolidation as it matures as companies also start looking at profitability and not only growth numbers," Gopal Balachandran, Chief Financial Officer and Chief Risk Officer, ICICI Lombard General Insurance Company said.
Balanchandran said it will be interesting to see how the digital insurance companies -- those who sell policies only online -- log the accelerated growth rates in 2022.
In August 2020, ICICI Lombard announced the acquisition of the general insurance business of Bharti Axa General Insurance by way of a demerger. In September 2021, the IRDAI granted the final approval for the deal and ICICI Lombard expects to realize the synergy benefits over the next two years. Pointing out that the general insurance industry being price sensitive, the economies of scale of the players will be another advantage that may bolster the mergers and acquisitions (M&A).
The price war at the market place has made some companies needing capital infusion and this may also trigger M&A. Large general insurers like ICICI Lombard are expected to derive operational efficiency owing to the investments made in the digital transformation and strengthening of the distribution channel.
