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.
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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.
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