You recorded a 30% growth in premium during FY13, while profit before tax spiked 98%. What does FY14 look like
Last year, we were ahead of the entire market. It is difficult to predict what the year ahead of us would look like because all signals are not very positive. But I am an optimist; I am still looking at the market to grow at not less than 15-18% during the year. That is why I am pegging our growth at more than 20%.
What, according to you, is working against the general insurance industry
In the last 10 years, our penetration has not increased much. Although the industry has achieved close to R70,000 crore worth of premium now against R10,000 crore in 2001, the point is that we were only 0.69% of the GDP at that time and, now, we are 0.74%. But there are some good things, too. For example, in 2011, big corporate houses were contributing 52-55% of the business, while 45-48% was personal insurance. Today, the situation is different, because it is the individual consumer who is giving premiums to the insurance industry. As much as 70% of premium is coming from consumers right now. About 50% of the total general insurance industry is the motor business and about 18-20% is health. The weakness is coming from the commercial line, which has gone down and this is not a healthy sign. The best course will be a 60:40 ratio in favour of consumer premiums.
What is your business mix looking like
Our commercial business is still at 42-45%, while auto and health are 55-58% of the total. We are a new player in health insurance since it has been only 18 months. We are at a disadvantage because of being late entrants. But what we are changing is that we are not banking too much on third-party administrators (TPAs). We have already built a team within our company.
The regulator has been stressing on the fact that there is a serious reduction in the number of agents on the field. What is your perspective
Our focus from day one has been on individual agents. Tata AIG has been one of the few companies that did not tie up with an auto manufacturer. I agree that due to a big setback on the life insurance side, many agents have left the industry. But we, as a company, have had agents who have worked with us for over 12 years. I will not say that we have lost agents, but yes, the rate at which we are able to increase the number of agents is slow. It is a marathon to manage this number. One of the things we did to manage it is to increase the number of branches to 77. We are looking at expanding our presence in the class III and class IV cities. We have our presence in the big cities and we do not want a second branch in these places.
Banks have stated in the past that they may not take up the bancassurance opportunity, since they are happy with the current arrangement. Some even blame the lack of trained individuals and expertise in the sector. As a non-bank insurance player, what are your thoughts
The banks have done a good job on the banking side of things, but what are the other things that they can provide to the customer If my agent with 50-100 hours worth of training can sell an insurance product, I don't buy the argument that banks with their qualified staff cannot sell insurance products. Push to sell from the banking branches is not there at all because, for a banker, this is probably the last priority. Somewhere, if the general insurance industry has to expand its reach, bancassurance has to move to the next level.