``JLT Independent has premium placements exceeding Rs 1000 cr in a span of three years’’
Employee Benefit insurance market in India for India placed programs will be around Rs 20,000 cr.Group Health will be the largest segment in EB followed by Group Personal Accident and Group Term Life.Increasing number of corporates are buying employee benefits programme to keep up their benefits offerings with their peers and emerging needs of the workforce
Which are the segments where JLT Independent is prominently present in India? Does the company handle only international clients or Indian companies as well?
Over 85 per cent of our client base is local and segments such as energy, construction, large complex corporate risks, financial sector risks, pharma, aviation, political risks, cyber insurance, sports, media, entertainment, agri, employee benefits are the segments we are gunning to be number one in the next three to five years, in most of which we are already amongst the top three.
How do see your performance in Indian market?
As you know, JLT Independent is one of the only specialist risk advisory and broking company with an in-depth understanding and knowledge of servicing capabilities in sectors like energy, construction, large complex corporate risks, financial sector risks, pharma, aviation, political risks, cyber insurance, sports, media, entertainment, agri, amongst others.
JLT Independent has already established its presence in India with premium placements exceeding Rs 1000 crores in a modest span of three years.
JLT Independent is confident of growing at an average of 30 to 40 percent in the next three years. Also our Employee Benefit solutions specialty is likely to grow at over 30 percent over a period of three to five years on the back of cutting-edge analytics, technological platforms and market leading wellness and claim solutions.
What is the size of employee benefits business in India? Are more corporate buying employee benefits programme and also are the existing customer increasing their level of benefits or covers?
Employee Benefit insurance market in India for India placed programs will be around Rs 20,000 cr.Group Health will be the largest segment in EB followed by Group Personal Accident and Group Term Life.Increasing number of corporates are buying employee benefits programme to keep up their benefits offerings with their peers and emerging needs of the workforce.
With the increasing awareness about the health and related risks, higher prevalence of lifestyle disease and escalating cost of treatments, we do see corporates improving their programs in terms of benefit levels offered or the quality of cover as well being enhanced.
We at JLT consult clients on areas such as program review and plan design with Benchmarking studies and Claim trend analysis.
How do you see the trend that health premiums for individuals are on the rise?
Insurance premium rates in retail health policies have hardened with claim ratio of most Insurers in Health portfolio consistently remaining adverse over the years now.
We have occasionally witnessed solvency margins of Insurers under pressure and at such times the mounting losses in Health portfolio continue to worry Insurers. While we do appreciate the need to improve loss ratio by correcting pricing, we expect Insurers to also simultaneously work towards managing claims cost better through effective contracting with hospitals.
Additionally given the premium rates have been increased the quality of coverage offered should also be revisited by Insurers and products should be structured to cover emerging needs in healthcare.
Have you seen the rates going up in India for Apr1 renewals?
We have seen rates significantly harden in the employee benefits business However on the property and casualty side we are still seeing some softening on an average of 8% to 10%.
Do you think Indian customers face problems in getting their claims and apathetic attitude of insurers are responsible for this?
Insurance sector after its liberalisation in 2000 has become more competitive and customer-friendly. Available data suggests that the claims process is also tilting towards customers as increasing number of insurance companies vie for the same business.
A good example would be of motor insurance wherein a retail customer today has a wide array of options based on experience with insurers. However, there is certainly good scope to become more customer-centric and improve the standards of service.
Do you think Indian insurance customers are increasingly accepting various aspects of `risk management’ where brokers can play a role in this matter?
Risk management is due to play a significantly important part in the evolution of insurance in India. We are seeing a large number of complex risks being managed at large corporates by seasoned risk managers and with brokers such as JLT providing specialised risk advisory services drawn from our global experience and knowledge, we believe the Indian clients would see this as an integral and indispensable part of their risk management/risk transfer strategy.
Is the Corporate insurance market shrinking as insurers are more focusing on retail market?
Definitely not. Large corporate risks today need specialist advisors and brokers and this need is expanding exponentially. Today, clients are looking at bespoke solutions for their businesses and hence we see an upward trend in the uptake of risk advisory due to our specialty approach.
If we look at agri market, three years ago, from a 500 million dollar market, it is today almost a four billion dollar premium market and is likely to exceed six billion in the coming three years. Opportunities are significantly increasing in the market not to mention that retail/ personal lines are experiencing high growth rates. With the advent of technological platforms and online distribution models we are certain that personal lines will also experience an exponential surge in growth.
Does presence of foreign reinsurance players make any difference in the industry?
Yes. To begin with it provides additional capacity for the market place which is growing continually at a significant rate over the last 15 years. Also we believe that some foreign reinsurers would introduce products which will cater to a new breed of insurance buyers thereby increasing the penetration of general insurance in the Indian market.
Do you think Indian insurance industry is opening up for global Insurtech trends?
With the advent of technology and for the Insurers to deliver better value proposition in terms of delivery of products and claims, we believe Insurtech will play a significant role. We already have witnessed a significant volume of frictional costs coming down for insurance companies due to Insurtech and we see more adoption of Insurtech solutions in the Indian insurance market in days to come.
What are the regulatory concerns of Indian broking industry?
Regulatory environment is very positive in India, It looks at the interest of all its stakeholders, most importantly, the insurance buyer. Insurance education is one area where the regulator and the insurance industry could make a marked difference.
Would you like 100 % FDI in broking?
JLT Independent will experience no change with the changes in FDI as both our shareholders, that is, JLT and Sunidhi are arduously committed to growing this business.
Is JLT dealing with Cyber and other liability products? Are they growing?
Cyber is risk less understood by large number of corporates and hence we are playing a very crucial role of educating customers as well as procuring best-in-class wordings which are used globally to the Indian market. While the value of premium paid at this stage is low we foresee this class of risk as one of the largest going forward.
Why broking is not picking up the way it plays its role in the developed countries?
We look at it a little differently. We believe that ever since insurance liberalisation took place in 2000 up until date, over 30 percent of the entire insured market is being brokered, Amongst the channels of distribution, broking has been growing at the fastest pace.
The volume of the business being brokered as a percentage of the overall business is increasing every year as customers are seeing the value a broker brings to the table and represents the client in front of the insurer.
You prefer to deal with public sector or public sector insurer?
JLT Independent Insurance is in a way sector agnostic when it comes to doing business.Historically in India, state-owned insurance companies have done commendable work and their understanding of India is tremendous.
Thus, for us doing business with state-owned insurance companies is a pleasure as we bring the global expertise to match their understanding of India. New age players bring special understanding and products and JLT is excited to work with all new players that have been working in India in the last few years.
Do you think Indian market has adequate numbers of players and products to serve the customers?
With the opening up of insurance sector at the beginning of this century, a number of new entrants have started operations and the whole sector is doing very well. Gentle nudge from the regulator has helped in the entire sector turning more customer-friendly and taking insurance-both life and general to the door steps of all Indians.
The liberalisation has also brought in global brokerages and specialist ones like JLT to India. Product diversification and product innovation too are seeing a very health trend. Harnessing technology is also benefiting the insurance industry.
Although the penetration of both life and general insurance is still really low compared to advanced economies, the insurance sector as a whole is geared to take on the new challenge of growth and covering more Indians.
The government of India is also taking many initiatives in reaching out and making insurance available to more Indians. Thus, while new entrants are always welcome, the insurance sector in India is well equipped to service the needs of all Indians.
How do you see the developments in India re/insurance market in next five years?
Undoubtedly GIC Re will continue to dominate the reinsurance market in India for some time in the future owing to its robust understanding of the Indian risk landscape. In the last 40 years they have been one to pay the nat cat losses in the country
However, there is a clear interest from global reinsurers towards India and this trend is likely to continue. We already have Lloyds and other reinsurers setting up offices in India in order to expand their foot hold in the Indian arena.