Universal Sompo General Insurance, known for its focus on motor and crop insurance, is setting its sights on expanding its health and commercial lines portfolio. In an interaction with Narayanan V, managing director and CEO Sharad Mathur shares the strategic rationale behind this diversification. Excerpts:
Your gross direct premium income (GDPI) till November was ₹3,622 crore. What is your projection for FY25 based on the current growth rate?
Last year, we closed with ₹4,622-crore GDPI. For FY25, we expect a GDPI base of ₹5,060 crore. Motor insurance will contribute around 46%, crop insurance 25% and health 17%. Commercial lines ― comprising fire, marine, and miscellaneous insurance ― will have a 12% contribution.
Aren’t you highly concentrated on a single segment ― motor insurance?
Initially, Universal Sompo focused heavily on crop insurance, which at one point accounted for 70% of our total premium portfolio. About four-and-a-half years ago, we decided to diversify into other segments, including motor, health and commercial lines.
Our approach has been phased. First, we stabilised crop insurance and made it profitable. Then, we grew motor insurance, which used to account for 6–7% of the portfolio, but now stands at over 40%. Having stabilised motor insurance, we are now focusing on health, commercial lines and engineering at the same time.
We understand that health is a business of trust and a lot of work needs to be done. We are planning to do a lot of print media campaigns to popularise the Universal Sompo brand among retail consumers. We have also built our claims service capabilities by partnering with 13,000 hospitals across tier I, II and III 3 cities for cashless claims settlement. We will focus both on retail health and group health (employer-employee) insurance.
How do you see the portfolio mix changing?
By the end of this year, we aim to be present across retail health, group health and Ayushman Bharat. Consequently, we expect a significant growth in the health portfolio from next year. We expect our GDPI to be ₹6,000 crore for FY26. We are aiming at a balanced portfolio with crop, motor, health and commercial lines, each contributing 25%. While crop insurance’s share will reduce as other segments grow, our focus on the segment will remain strong as it is a key government scheme supporting farmers.
Has the slowdown in vehicle sales impacted your motor business?
We provide insurance across segments. While these segments have experienced a record growth in recent years, the current slowdown is only temporary. Nearly 50% of two-wheelers in India are still uninsured. Despite partnerships with leading auto OEMs, our portfolio mainly consists of renewal business and uninsured vehicles, rather than new vehicle insurance.
Instead of competing in metros, our priority is to target users in smaller towns. We have established an emerging markets vertical to meet the needs of these under-served areas. For vehicles with only third-party insurance, our agents work on the ground to upsell own damage coverage. So, we don’t see any impact of vehicle sales slowdown.
You are backed by Indian Bank, IOB and Karnataka Bank. Do you rely heavily on the banca channel for distribution?
We have a very justified distribution model. The banca channel will account for just 8% of our projected ₹5,060-crore GDPI for FY25. The agency channel will contribute 13% while auto OEMs/dealers and crop insurance will account for 29% and 25%, respectively. Corporate brokers will contribute 15% and contractual obligation products for e-commerce will account for 10%.