Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessEconomy

Expect more price discipline in non-life industry: Tata AIG General CEO

Garg believes that the cost of irrational behaviour in product pricing is huge

March 10, 2017 / 01:23 PM IST
Private sector non-life insurer Tata AIG General Insurance is expecting a more rational pricing mechanism in the general insurance industry. In his first media interaction after taking over, Neelesh Garg, MD & CEO, Tata AIG General Insurance talks to M Saraswathy from Moneycontrol.com about the business strategies and growth plans. Excerpts:Will the retail lines of business be a focus for you?Tata AIG Genera aims to be a full service company. Hence, we will aim to be a strong player in both the retail lines as well as the commercial lines of business. Overall, the size of the industry is also getting bigger and is expected to touch Rs 1.20 lakh crore by the end of this financial year. In this, both individual and group policies will see a growth. However, newer concepts like risk-based premium will also come into the retail market in segments like health and motor.With respect to products, we will have new features added to the existing health product. Further, value-added benefits like road-side assistance and distress call will be provided under the motor cover.Is bancassurance an area of opportunity?Selling through the bank channel is a big opportunity. In public sector banks, the customer base has not been tapped fully. Since the insurance regulator has now allowed banks to tie-up with three life, non-life and standalone health insurers each, this will be a good opportunity for us. We are looking tie-up with a few more banks so that our product reach improves.Since your peers are going digital, would that mean lesser number of branches?We are investing heavily in new technology. However, the aim is to increase the number of touch-points that the company has. Tata AIG is looking at having service points at 1000 locations for customers by the end of this financial year. This would enable customers to have access to our entire bouquet of services including claim intimation, document submission as well as buying add-ons.Heavy discounts have led to huge losses for the non-life industry. Is there an improvement that is seen?Old private sector insurers are the most rational in terms of pricing. For them, combined ratios are going down meaning that underwriting situation is slowly improving. The cost of irrational behaviour in product pricing is huge. Going forward, we will see more discipline in the market. We as a company do not compete in a particular business where the premium is not sustainable in the long run. Hence, in the future, we expect the pricing in segments like fire and group health to improve.

first published: Mar 10, 2017 09:32 am

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347