Significant share of two wheelers in India still uninsured: SBI Gen Insurance MD & CEO

DH INTERVIEW

Shakshi Jain Bengaluru, DHNS

Bengaluru: There is a clear disparity between two wheeler and four wheeler vehicle insurance in India, with a significant portion in the former category still uninsured, SBI General Insurance Managing Director and Chief Executive Kishore Kumar Poludasu said. In a conversation with DH’s Shakshi Jain, he also shed light on the company’s aspirations, going forward, besides answering some larger questions on the insurance industry in India.

Edited excerpts.

How are the growth numbers looking for the financial year 2023-24?

Right now, we are growing at around a pace of 23 per cent, which is 10 per cent over and above the industry growth. The industry is growing at 13 per cent. So, it will be more or less around 20-23 per cent band for the financial year 2023-24. Last year, it was around Rs 10,888 crore on Gross Written Premium basis.

What is the Indian insurance industry’s market size presently and what is your share within that?

The number was at Rs 2.5 lakh crore last year. The industry grew by 13per cent till January. So it may be around Rs 2.7-2.75 lakh crore.

There are two different parametres. If we are talking about the overall industry, we are at 4.21per cent and when we’re talking about only the private industry,  there we are at about 6.51per cent.

What is your aspiration for SBI General Insurance during your tenure?

Right now, in terms of the market position, we are sixth in the private sector industry. In the next couple of years, we are looking at moving up by one more position, that is the fifth position. That is the near term goal, we can say.

What is the business breakup between the various insurance segments that SBI General caters to?

Predominantly health and motor are the two segments where we have the maximum shares, followed by crop and the corporate lines. 

The share of health would be around 35 - 36 per cent. Motor is also having around 34 per cent share. Crop is 20 per cent and corporate and others are the remaining residual.

How has business in the motor insurance segment grown following the Covid-19 pandemic?

If you see passenger cars, the growth improved to 26 per cent last year, it was 13 per cent before that. Again, it moderated to around 7.5 per cent, so the pent up demand effect is already normalised. Right now, we are able to see around 7 per cent growth in terms of passenger cars, which is again reflecting in the motor insurance profile. But, having said that, the uninsured vehicles are still occupying a significant portion, mainly the two-wheeler segment. From Vahan data we are seeing around 45 to 50 per cent of the two wheelers are still uninsured. State governments, the regulator and insurance companies - all three stakeholders - are working towards reducing the number of uninsured vehicles.

How much of your business comes via a pure play online route?

As an industry the numbers are in low single digit in terms of direct online purchases. So we are also in the similar line up, but we do have digital partnerships where fintech aggregators do generate online digital business.

If you see the motor segment, there people are still comfortable going through the agents, rather than going online. But we are seeing a change in the pattern. We are seeing new customers coming on digital channels. So, going forward, we do expect that number will go up.

In the health segment, maybe 35 per cent of the overall business is coming via the online route. Health and motor are the two major segments where business is coming through online channels.

Where is maximum business coming from, geography-wise?

In the corporate line definitely the western part is a dominant area because most of the corporate headquarters are located in the western side. Health and motor are spread across the nation uniformly. We’re not seeing any kind of high penetration or low penetration, but within each and every state, the rural and tier II,III cities are seeing larger interest in terms of coverage. Crop insurance is one area, being government driven, wherever governments are interested, we are seeing the numbers there.