India’s Leading BFSI and FinTech Companies 2022

27 Key Trends Strengthening Digital platforms: The pandemic has accelerated the digital transformation of insurance companies. The insurance companies have strengthened their digital platforms to offer wide range of products and services catering to customer’s need, such as use of chatbots, artificial intelligence, big data analytics, blockchain, machine learning, telematics, clouds etc. soon, drones will also be used for crop insurance. The growing customer preferences and acceptance of new technology led to rise in the Insurtech firms. Increasing awareness about insurance: The outbreak of pandemic led people realise the importance of having health insurance. In order to cater to this need, insurance companies introduced health specific policies related to COVID-19. Key Policy Initiatives Policy initiatives Impact IRDAI released guidelines for surety insurance products to come into effect from April 1, 2022. This will help to promote and regulate sustainable and healthy development of the surety insurance business in India. The Government approved capital infusion of ` 44 b n to Export Credit Guarantee Corporation ECGC Ltd over a period of five years from FY22 to FY26. This will strengthen ECGC’s underwriting capabilities to support mainly MSME exports. In August 2021, the Government passed The General Insurance Business (Nationalisation) Amendment Bill to bring in more private sector participation in the public sector insurance companies. This move will bring in more private sector capital in the general insurance business and also offers wide range of products available to people. In Union Budget 2021, the FDI limit in the insurance sector increased to 74% from 49% This will attract more overseas investment in the insurance sector. Infusion of ` 30 bn by the Government into the state-owned general insurance companies This will help improve the overall financial health of the state-owned general insurance companies Listing of state-owned insurers The proposed listing of state-owned insurers will help them raise fresh capital from the market. Challenges Lower insurance penetration: Insurance penetration in India which stood at 4.2% in FY21, is far lower than insurance penetration in USA and Canada, advanced Europe, the Middle East and Africa and advance Asia Pacific. The low insurance penetration as compared to developed countries shows the lack of awareness about the insurance sector in the wider section of people in India. Outlook Consolidation: The market structure of Indian insurance sector indicates that the top few players control a major market share while rest of the share is controlled by smaller players. This has led to consolidation activities in the industry in recent years. The trend of consolidation is expected to continue in the near term as well. Customer centricity: Customer experience will remain at core of insurance business. With the help of digital technology, insurers will seek to provide a seamless omnichannel experience to customers. Increased adoption of digital ways: Digital marketing channels, digital modes of payments and big data will witness enhanced adoption amongst insurance companies. Dun & Bradstreet