Surety insurance bonds, pegged to be the next lever for infrastructure growth in the country, should take off by the next financial year, said Neelesh Garg, managing director and chief executive officer of Tata AIG General Insurance.
On the sidelines of a national insurance summit held on Oct. 3 in Mumbai, he exclusively told BQ Prime that for these bonds to take off, there is a requirement for large reinsurance support. Also, certain other preconditions, like the Indian bankruptcy code, need to be in place.
As a company, Garg said that they are looking at surety bonds and that Tata AIG is in the advanced stage of discussions with top global reinsurers.
"We intend to launch a surety bond product, hopefully before the year ends."
Providing an industry outlook, he mentioned in his panel speech that the non-life insurance industry is currently growing at 14% CAGR, but to achieve the vision of 'Insurance For All By 2047' as set by the Insurance Regulatory and Development Authority of India, the industry needs to grow at 20% CAGR.
While he said that most major levers are in place for growth, the industry is working with the regulator on opening up distribution, which will enable the industry to grow at the desired 20%.
As for the expenses on the management front, he said that Tata AIG is compliant with the new 'expenses of management' guidelines. "We have not seen any irrational increase in competition on the basis of commission post new EOM guidelines."
Watch the full interview below:
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