IRDAI's BC Patnaik On Life Insurance Industry

NDTV Profit

IRDAI's BC Patnaik expects the life insurance industry to grow at a steady pace and talks about the confidence of companies to hit double-digit growth.

Transcript

00:00 Hello everyone, we are at the sidelines of the National Insurance Event and we have the

00:03 honour and the pleasure of the company of Mr. B. C. Patnayak, Member Life of IRDAI.

00:10 Thank you so much sir for taking our time to speak to us.

00:14 Just a couple of questions on the industry.

00:16 You spoke of the kind of growth that we are envisioning for the industry by 2047, which

00:22 is also the Chairman's vision.

00:24 So how is it panning out for the industry?

00:27 What is the kind of growth that you are seeing in the life insurance space and what are the

00:32 points that are going to propel the growth further?

00:36 Actually what happens is, like all countries, India also desires to be a developed country.

00:43 Economically developed and also socially developed.

00:48 Because insurance is one aspect which protects the industry and protects the social fabric

00:53 of the country.

00:56 So earlier maybe there could have been affordability issues.

01:02 But still if you see the growth during the last 20-25 years has been quite remarkable.

01:10 So we just want to build on that growth story and as you know the Amrit Kal movements are

01:15 going on.

01:16 So 2047, the entire country wants to be a very, very developed nation.

01:23 And one of the aspects is that the insurance penetration or insurance coverage, insurance

01:30 for all has to be a prerequisite.

01:33 So that development can be sustainable and can continue for a long, long time.

01:39 And yes, more than the regulator, it has been well accepted by the industry and well accepted

01:45 by the society.

01:46 Because everybody feels, yes, there should be an insurance cover for everybody.

01:51 As an individual, I should have a life insurance cover.

01:53 If I have a property, that should be also covered from catastrophic.

01:58 If I have an agricultural land, I should have a Fossil Vima Jojana.

02:02 So if something happens to me or to my family, I should have a health insurance.

02:06 So people have acknowledged this fact that yes, these are the things we should be having

02:12 for ourselves.

02:13 Whether, that means big or small, it is everybody's desire.

02:19 If you see Aishwarya Mandhar, people voluntarily enroll themselves in their family members

02:23 so that they know that something happens, they can get health insurance, maybe up to

02:28 five lakhs.

02:29 Similarly, people who are at the upper level of the society, they feel that yes, I should

02:34 pay money from my pocket and I should have a health insurance or a life insurance or

02:38 from a motor school general insurance.

02:40 If I'm working in a very cohesive group, then yes, I can go for a group insurance for life

02:45 or health.

02:46 So these are the factors.

02:48 So it is inbuilt in everybody's mind that yes, insurance should be there.

02:54 And not only for me, but for all my family members.

02:57 So where is the growth rate of life insurance industry as it stands today?

03:01 You I'm sure have a visibility on the life insurance numbers for the half year.

03:06 How is it post COVID and how do you see it growing further?

03:10 So what is the percentage that we are at?

03:13 Life insurance in the country, if you see, you go by the enthusiasm of the companies

03:17 and the people and all.

03:19 Last year in March also, you see the enthusiasm of people who are there for large and big

03:24 summed insurance policies.

03:27 So it is a business in progress all the time, I can call it.

03:31 So all the life insurance companies are engaged in the growth story and they feel confident

03:38 that yes, we can grow in much more than double digit growth and all.

03:44 And there is good acceptance of the life insurance philosophy by the society.

03:50 And it should be growing at a steady pace all throughout.

03:52 There is no doubt about it.

03:54 Okay, sir.

03:56 So also now with non-par, the high ticket non-par sales of five lakh, you know, a lot

04:02 of pushback from the industry.

04:04 Do you believe, most of them seem to have maintained some level of growth in the first

04:09 quarter at least.

04:10 So what is the kind of response that you've seen from the industry?

04:12 Are they finding alternative avenues?

04:14 Because I was having a conversation with a couple of other people from the industry

04:17 on the life insurance side and they said that we now need to sell more policies.

04:20 Is it happening?

04:21 And what is the IRDAI doing to now fill in this gap?

04:25 You know, the shortage that has been created because of the taxation of the high ticket

04:28 policies now, the above five lakh.

04:31 What are the sort of things that the regulator is planning in that stead?

04:35 You see, the life insurance industry has a huge scope.

04:40 If you see only the term insurance part of it, as I was telling the mortality protection

04:44 gap.

04:46 So in absolute term, a figure has been calculated by Swiss Re, which translated in Indian rupees,

04:52 is 1320 lakh crores.

04:56 And if you ask anybody, yes, they feel that I should be having a protection policy.

05:02 So that has nothing to do with a lot of taxation and others.

05:05 Even for less than five lakhs, you can have a huge sum.

05:09 Because if you see, suppose that your age, if you take one core policy, the maximum premium

05:13 will be 25,000 rupees.

05:14 Suppose if you take 10 crores, it will be only 2.5 lakhs.

05:19 So it is much less than the five lakhs.

05:21 But 10 crores will also involve a lot of underwriting issues.

05:25 Because when the insurer accepts a policy, it is based on the income level also and health

05:30 parameters.

05:31 So many people will not be granted that much of insurance also.

05:35 So the scope is huge.

05:38 And suppose, let us say, 50 crore people, they have insurance of one crore.

05:45 So that reduces the protection gap.

05:50 You get my point.

05:52 So this is how the country should look at it.

05:54 Plus, the life insurance industry has a great value in its endowment policies, where people

06:01 can plan both insurance and a targeted goal for a long term, 20 years, 25 years, 30 years.

06:08 Yes, non-par, as you suggested also, people can have more of guaranteed sort of thing

06:13 over a period of time.

06:14 ULIPs are a good option also.

06:17 So it has got huge scope.

06:19 So apart from the taxation also, there are huge scope.

06:23 So I think we have not touched even 5% of that scope.

06:28 [MUSIC PLAYING]

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