In insurance, moment of truth comes at the time of settling claims

Insurance | admin | November 1, 2011 at 5:23 am

The general insurance business may be rocky but it's also on a roll. Even after 10 years , few companies are making money in it but that hasn't stopped the industry from growing at a very health 30 %. Not bad since most sectors are currently facing a slowdown . Despite that growth , the general or non-life business is only a tenth of the life insurance industry . Also,unlike life ,it never got good valuations because it was felt that you could only lose money in a business where the biggest drivers-health and motorwere still unprofitable .

So when we met up with the ICICI Lombard head honcho Bhargav Dasgupta , referred to as BDG, the comparisons were bound to capture a good part of the initial conversation . In keeping with ICICI group's philosophy , the current size of the industry is never seen as a constraint , and so naturally Dasgupta is quite gung-ho about his business .Theo ptimism perhaps is also driven in equal measure by its position as the market leader – it's the largest non-life and health insurer .

With health insurance portability around the corner , it is well placed to draw customers from PSU insurers ,butDasgupta is non-committal abouthisstrategy .Hedoes talk about another strategy though . He is not that focused on increasing topline or increasing profits as he is on growing the industry itself. Besides, he also feels that by bargaining down prices with healthcare providers , the health insurance business can become profitable .

Dasgupta , a sports enthusiast (plays tennis to keep fit), opens up quickly enough , much like the open-space architecture of his newly purchased office in CentralMumbai'sP rabhadevinow the company's headquarters .Butitcouldbe a bittooopen for some people as we notice executives facing job interviews and prying eyes within that architectural theme .

The 45-year-old banker , who has been with the ICICI group from the start , suggests that the non-life industry is still in its early stages . "Although the industry was opened up 10 years ago , liberalization happened only three years back when companies were granted the freedom to design and price products .

This has resulted in competition and innovation ," he says . He forecasts a 20% growth for the Rs 40,000-crore non-life industry . But is the business feeling the slowdown heat ? He replies in the affirmative and describes how he got to see it coming much before it became a reality when the engineering insurance slowed down-a sign that new projects were not taking off.

Slowdown in car sales could also be a bit of a dampener , but he also feels that it's unlikely that people are going to take less health insurance . His theory being people seldom ignore education of their children and the family health . An optimist , he feels insurance will gain popularity when customers see companies paying on time . "The moment of truthiswhen itcomestoclaims ," he says . Dasgupta is a big believer in universal health insurance where he sees technology as a tool to provide cover to the poor .

As part of that belief, ICICI Lombard has come up with a portable device for issuing biometric smartcards . The device enables the company to issue group policyholders cards which not only provides a photo identity but also stores information about the policyholders . Naturally ,when thebusiness revolves around service , an executive's success is also bound to be measured in terms of the difference they make to the life of a consumer .

So one of Dasgupta's earliest successes came when he was heading international business in ICICI Bank where the bank managed to improve efficiency by offshoring most of its operations to India . Thisenabledthebankto provide a better return to depositors . He believes speed and accuracy of claim payment along with employee engagement would be the determinant of growth of an insurance company .

Source: Economic Times

Was this article useful? Subscribe to our newsletter to get daily updates in your email for free.