‘Health insurance will continue to be our biggest growth driver’

Marsh India Insurance Brokers expects a 25% year-on-year increase in premiums placed to around Rs 11,100 crore for corporate clients in the current calendar year (2021), says country head and CEO Sanjay Kedia. In an interview with Mithun Dasgupta, Kedia says employee health and benefits or health insurance will continue to be the biggest growth driver for the company. Excerpts:

What was the amount of premium placed for the year 2020? What was the year-on-year growth? What kind of year-on-year growth is expected for 2021?

In 2020 (January-December), we placed premiums of around Rs 8,900 crore for our corporate clients, which was a 20% increase over the previous year, mainly driven by corporate group health policies. In the current calendar year (2021), we expect a 25% increase in premiums placed to around Rs 11,100 crore. For the next year (2022) also, we expect over a 20% Y-o-Y jump in premium placed.

Employee health and benefits segment is the biggest growth driver for Marsh India. Do you expect any change in this composition going ahead?

Marsh is the biggest employee health and benefits broker in India and covers over five million of lives through our corporate clients. Employee health and benefits or health insurance will continue to be the biggest growth driver for Marsh India. With the current landscape, we are witnessing employers are looking to shift from defined benefits to defined contribution model offering a gamut of insured as well as non-insured benefits to address unique needs through choice and flexibility. Flexible benefits solution will accentuate organizations’ focus on affordability, differentiation, innovation, adaptability and sustainability in the long-term. So, the demand for health insurance covers and other evolving benefits will continue to increase in coming years.

Mental health is emerging as one of the key risk issues for corporates post COVID-19. Do you see corporates incorporating mental health covers in group medical coverage (GMC) plans?

Yes, there is a pick-up in demand and we are witnessing increasing enquiries and adoption for such covers, particularly since the inception of the COVID-19 pandemic. We have seen progressive organizations having an OPD (Out-patient department) coverage ranging between Rs 20,000 and Rs 50,000 per family covering consultations, therapies, pharmacy and diagnostics.

Were the revised trade credit insurance guidelines necessary? Currently, what is the market size of trade credit insurance? How is it expected to grow after these revised guidelines?

The revised guidelines on trade credit insurance, IRDAI (Trade Credit Insurance) Guidelines, 2021, is a positive step. This will help suppliers as well as licensed banks and other financial institutions to get insurance protection which will help them manage country risk, open up access to new markets and to manage non-payment risk associated with trade financing portfolio. This move to support factoring business by insurance covers will unlock huge values in the balance sheet as account receivables of corporates, particularly for SMEs/MSME sector. Corporates will now be able to free up capital and invest in businesses as a trade credit insurance policy will enable them to monetise the accounts receivables.

This was much-needed reform aimed at providing trade finance facilities to every business, especially SME and MSME segments. This segment has always been bereft of banks or NBFCs’ reach. For most of the companies, account receivables (AR) are the biggest chunk of assets, which in absence of insurance back trade finance they were not able to monetise.