Bajaj Finserv - the holding company of Bajaj group's financial services business - has laid out plans for the next five years. During this period, it is eyeing 18-22 per cent compound annual growth rate (CAGR) in net profit at Rs 21,000-24,000 crore on a consolidated basis.
The Indian insurance industry is set to focus on customer-centric technological adoption and expansion into rural areas to drive growth in 2025.
NBFCs with a proven track record, supported by the brand values of reputed corporate, can play a key role in bringing the benefits of banking and economy to the underserved and newer segments of India.
We are, therefore, setting up more branches in more tertiary terms, like tier 2 and tier 3 terms. Going forward, that is where the growth will come.
Following are comments from economists at leading financial institutions, banks and rating agencies on the interim Budget:
High-value insurance policies experienced muted growth in the first six months of the current financial year after the Centre decided to tax such products in this year's Budget. Simultaneously, there has been a marked improvement in the growth of policies with premiums of 'less than Rs 5 lakh', mainly originating from smaller cities. During this year's Budget, Finance Minister Nirmala Sitharaman proposed that insurance policies (excluding unit linked insurance plans or ULIPs) with an aggregate premium exceeding Rs 5 lakh, and the maturity amount, would not be exempt from tax.
In order for life insurance customers to attain maximum benefits, it is crucial for the persistency ratio to be far higher than its current level, top executives of the industry said at the Business Standard BFSI Insight Summit on Thursday. The persistency ratio is a metric that measures the number of policyholders who continue paying renewal premium and is gauged at varying stages in the life of a policy. A higher persistency ratio is seen as an indicator of an insurance product that caters satisfactorily to the needs of a customer.
Ahead of the Union Budget 2023, insurers are hoping that the Centre will act on their recommendations, which includes increasing the limit for tax deduction under 80D of the Income Tax Act. Also among them are issuance of long-term bonds, tax incentives for home insurance premiums, and a separate section to claim deduction for term-insurance premium, among others. These suggestions would help improve the penetration of insurance in the country.
These products are extremely transparent and are the lowest charged products in the insurance space. The policyholder has to only pay the fund management charge. Hence, from the cost side, ULIPs are very competitive.
If bank and service provider are not compliant, pay manually, or give standing instruction linked to bank a/c, suggests Bindisha Sarang.
IRDA's condition that treatment under AYUSH has to be at a government hospital or an institute recognised by the government makes insurance cover difficult.
Twenty years after India's insurance sector was opened up, unshackling the control of state-owned companies, as many as 50 private players have set up shop. Along with their foreign partners, private players have brought about a sea change in the product offering, distribution and underwriting processes, and services levels. Yet, India's insurance penetration needle has not moved much.
Bengaluru-based Healthtech start-up Mfine has rolled out a coronavirus assessment feature which enables virtual medical consultation to assess patients who have flu-like symptoms. Portea and Haptik habe developed chatbots, which will disseminate information related to coronavirus.
Bupa and Axa have already declared their intention to raise stakes.
Insurance companies are seeking a separate deduction limit of Rs 1 lakh for insurance premium payment under Section 80C of the Income Tax Act in the upcoming Union Budget to bring in more people under the ambit of insurance. The insurers also want reduction in the goods and services tax (GST) rate of 18 per cent currently applied on health insurance products to 5 per cent to make such products more affordable to common people. Finance Minister Nirmala Sitharaman will present the Union Budget for 2022-23 on February 1.
>You can buy a life insurance policy for someone else only if you have an insurable interest or expect financial loss from that person's death, points out Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance, answering insurance questions.
The online channel has only been successful in making inroads in metro cities.
Insurance experts said since it may be difficult to set a tariff or fixed rates for Covid-19 treatment, an indicative rate chart has been proposed.
Inflow of more funds is likely to widen the reach of insurance and drive M&A activities in the sector where growth has stalled.
