“Health insurance will continue to be our biggest growth engine.”

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 Head of State 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 driver of the company’s growth. Excerpts:

How much premium has been set for 2020? What is the annual growth? What kind of annual growth is expected for 2021?

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

The employee health and benefits sector is the biggest driver of growth in Marsh India. Do you anticipate any change to this formula in the future?

Marsh is India’s largest employee health and benefits broker covering more than five million people 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 seeing employers looking to shift from defined benefits to a defined contribution model that offers the full gamut of insured and uninsured benefits to meet unique needs through choice and flexibility. The flexible benefits solution will highlight organizations’ focus on affordability, differentiation, innovation, resilience, and long-term sustainability. Therefore, the demand for health insurance covers and other advanced benefits will continue to increase in the coming years.

Mental health is emerging as one of the major risk issues for companies after COVID-19. Do you see companies incorporating mental health coverages into Group Medical Coverage (GMC) plans?

Yes, there is an increase in demand and we are seeing increased inquiries and adoption of such covers, particularly since the start of the COVID-19 pandemic. We have seen progressive organizations that have outpatient (Outpatient) coverage ranging from Rs 20,000 to Rs 50,000 per family covering consultations, treatments, pharmacy and diagnostics.

Were the revised guidelines for securing trade credit necessary? Currently, how big is the market for commercial 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 authorized banks and other financial institutions to obtain insurance protection that will help them manage country risks, open access to new markets and manage non-payment risks associated with a trade finance portfolio. This move to support factoring business through insurance caps will unlock huge values ​​in the balance sheet as corporate account receivables, especially for the SME/MSME sector. Companies will now be able to free up capital and invest in the business as the trade credit insurance policy will enable them to liquidate receivables.

This much-needed reform was aimed at providing trade finance facilities to all businesses, especially the SME, Micro, Small and Medium Enterprises sectors. This part has long been deprived of banks or the influence of non-bank financial firms. For most companies, accounts receivable (AR) is the largest portion of assets, which they have not been able to monetize in the absence of insurance back-end trade financing.