Tepid new business growth in health insurance a concern

State-run Central Bank of India has acquired a 26% stake in Future Generali India Insurance (FGII), becoming a promoter in the private general insurer.

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In an interview, FGII managing director and CEO Anup Rau tells Narayanan V that the tie-up offers a goldmine of general insurance opportunities for the PSB, while also helping the insurer to scale up its property line of business. Excerpts:

How will Central Bank of India coming in as a shareholder change things for FGII?

Unlike life insurance, bancassurance hasn't been a major distribution channel for general insurance companies, contributing about 6% of the top line. That said, I see strong potential here. SME lending is one big opportunity. Second, rural markets are tough to penetrate due to high distribution costs. Central Bank gives us a real opportunity here. It has 80 million customers and 4,800 touchpoints. On the other hand, the bank sees general insurance as a goldmine and an under-served space. I expect our share of business from bancassurance to rise from 6% to around 10% with this partnership.

Motor insurance accounted for a third of your gross direct premium of ₹5,408 crore. Is the slowdown in new vehicle sales affecting you?