Vishakha Mulye, executive director, ICICI Lombard General Insurance, in an exclusive interview with FE outlines the companys overall strategies to expand companys business.
What kind of new pricing (reduction) will happen now for ICICI Lombard What are the areas that would experience these reduction
ICICI Lombard continues to focus on quality growth with a risk driven approach to pricing. In a free pricing scenario pricing will be based on merit hence those with a lower risk profile would experience lower premiums. Our rating engines would be designed based on past claims experience and estimation of future claims incidence.
Will the new pricing regime now lead to unhealthy competition in the industry
Different insurers would have different strategies in a flexible pricing context. Full product flexibility is also expected from April 2008 onwards and the focus would shift to differentiation through product innovation, service delivery and distribution reach. Products that are already fully detariffed such as overseas travel insurance and health insurance provide pointers on how the market would compete going forward.
Will it impact your total premium income and profitability
Partial detariffing was introduced almost a year ago. ICICI Lombard continues to have a combined ratio less than 100 indicating the positive health of the business. Our focus is on quality growth underpinned by a risk based approach towards underwriting. Our cost structure is characterized by strong operational efficiencies achieved through scale and effective use of technology. We continue to enhance our customer franchise by focusing on clearly defined customer segments, multiple routes to market and service-led differentiation.
Are you streamlining your underwrting system
ICICI Lombard has always kept in mind a risk based pricing approach even in a tariff regime and we have developed robust underwriting processes that enable us to compete effectively in a changing environment. Our underwriting database has been built over a period of time since inception and ongoing experience of the portfolio behaviour is regularly assimilated to refine and sharpen our rating engines.
Will the price competition would make you focus away from corporate accounts and focus more on retail accounts,/b>
ICICI Lombard follows a multi-segment approach with dedicated teams independently focusing on each business opportunity.
Each team would develop and deploy the required business strategies for their target segment in line with competitive realities and within the governing objective of quality growth.