Generali keen to up stake in Indian JV – Times of India

MUMBAI: Italy-headquartered Generali Group is keen on increasing stake in its Indian joint venture with the Future Group to the fullest extent. Generali currently owns 49% in the non-life Future Generali India Insurance Company as against the 73% that is permitted under foreign direct investment (FDI) laws.
The private non-life company, which has been among the fastest-growing in the top 10 private insurers, has an established track record of profitability since break-even in 2014. It has increased its market share from 3.1% in FY19 to 3.9% in FY21 with a gross written premium of Rs 3,899 crore and is Generali’s biggest operation in Asia. Future Generali India is now pursuing growth through an increase in its motor insurance portfolio, which is currently 38% of its portfolio.
Speaking to TOI, Future Generali India MD & CEO Anup Rau said that the company does not need to turn to its shareholders for equity since 2019 as its claims ratio is among the best in the industry. “Our loss ratio is the lowest in the industry and better than some of our bigger peers. Our combined ratio for most of the industry is still above 100 because the industry has shown double-digit growth for over two decades now. As we scale up, our cost of acquisition and our fixed costs will get defrayed over a larger top line, lowering our combined ratio. The key to controlling the loss ratio is the quality of underwriting,” said Rau.
The uncertainty that the Future Group is going through with both Amazon and Reliance groups engaged in a tussle over ownership of a group company has not impacted the insurance venture. The foreign partner Generali continues to strongly back the joint venture. “Generali is very excited about India and the opportunities being afforded by the new FDI regulations and they are examining it. They have reiterated multiple times that India is a market they would be keen to invest to the fullest extent,” said Rau. He added that they are extremely patient and focused on building a long-term franchise, which would generate a healthy return of equity.
Rau added that the quality of underwriting has helped ensure faster claim settlement and a better claim settlement ratio. “We do our due diligence at the time of accepting the proposal. There is no underwriting done while settling the claim. In terms of net promoter score, we are among the best in class not just among the insurers in India and Asia but among the top 1% globally, across service industries,” said Rau.
While Future Generali India’s combined ratio (ratio of claims and management expenses to total premium) is still over 100%, it manages to remain profitable through investment income. “We have also built an AUM (assets under management) of a substantial amount. So, this has helped us continue to drive growth without running a capital deficit even at a combined ratio of over 100%. We have always been profitable since we broke even in 2014. This has allowed us to run a deficit on the combined ratio. We haven’t needed capital since 2019, while we have continued to grow significantly faster than the industry.”

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