Mumbai: Covid-related claims may have abated. But health and motor insurance are seeing inflationary pressures and a higher incidence of claims. According to General Insurance MD & CEO Bhargav Dasgupta, it is too early to say whether this is a structural change.
“Covid claims had come down, but we are seeing a shift in the non-Covid claims — elective surgeries, medically acute incidents requiring hospitalisations and non-elective surgeries,” said Dasgupta. He added that there was a need to watch the data and see the extent to which the cases are a backlog of elective surgeries and elevated practices that the hospitals are following because of new protocols.
Health insurance claims saw a surge in the second wave of the pandemic. This had resulted in a worsening of the loss ratio in the health business in FY22. With the ebbing of the pandemic, Covid claims have declined. However, the increased mobility has increased motor accident claims. “On the motor side also we’ve seen a frequency increase in the first quarter. Overall, there is an inflation pressure on claims cost,” said Dasgupta.
ICICI Lombard is looking to diversify its business by growing other segments. It has drawn up a strategy for growth is MSME business. “MSME is a very under-penetrated category, and we feel that with a strong service proposition and a good distribution mode, we can enhance the opportunity,” said Dasgupta. According to him, the segment, which has been growing at 25% and is now a Rs 1,000-crore business, can be profitable.
Traditionally, commercial lines of business are underwritten by insurance experts after which the policy is issued. ICICI Lombard has used artificial intelligence and machine learning to create a software engine that can underwrite nearly 90% of the policies it issues without human intervention. It also has the technical expertise, strong balance sheet and reinsurance treaties to support the business, which many others do not have.
The company is expanding its motor business by introducing new lines of products, such as an umbrella policy for all vehicles. “In two-wheelers, there is an under-penetration issue as owners forget to renew the policy. But they do not forget to renew car insurance. By offering it along with the insurance for the car, the continuity can be ensured,” said Dasgupta.
Besides this, the company has launched a ‘pay as you drive’ and ‘pay how you drive’ policy that charges a premium based on the quality and quantity of driving using telematics. According to Dasgupta, after health, another new driver of business could be cyber risks which is largely a corporate business now. ICICI Lombard has taken this to retail.
“Drones should become a big opportunity, and we have a product for drone insurance. I think there’s a lot of opportunity in the mobile handset insurance and extended warranty for consumer goods. These are still small segments but growing very fast,” said Dasgupta.