KOCHI: As India’s insurance industry witnesses rapid expansion, a pressing concern looms over its ability to retain and manage quality underwriting risks domestically.
The sector, despite its growth trajectory, faces a glaring skills deficit, particularly in advanced underwriting and risk management. The Insurance Regulatory and Development Authority of India (Irdai) has sounded an alarm, warning that without immediate focus on upskilling, there’s a real threat of high-value risks being ceded to foreign markets – a move that comes at a high cost for insurers and impacts India’s competitive standing in the global insurance ecosystem.
Speaking at ASSOCHAM’s 16th Global Insurance Summit and Awards, Satyajit Tripathy, Irdai’s Member – Distribution, emphasised the critical role of education and training in safeguarding the industry’s future.
Tripathy noted, “If we remain an industry that feels we can continue to sell mundane policies…then we will increasingly fail in our duty to address complex risks, develop underwriting capacity, and prevent those underwriting challenges from being outsourced abroad at high cost.”
FDI in insurance
The concern gains urgency as the central government mulls increasing the cap on foreign direct investment in the insurance sector.
While foreign investments promise capital infusion, they could further exacerbate the skills gap, leaving Indian companies to focus on selling simpler products like motor or health insurance while ceding specialised underwriting to global players.
Need for systemic reforms
Tripathy highlighted the need for systemic reforms, starting at the entry level. “Very soon the regulator will come out with regulations to ensure that we have more qualified people even at entry level while they are selling policies,” he stated, stressing the importance of moving away from outdated practices where individuals with minimal education could handle policy sales.
The industry, which lacks sufficient institutions and robust training programs, risks missing out on opportunities to attract and retain complex insurance business.
As Tripathy pointed out, “The best of our risks will go overseas with higher pricing, while companies here focus purely on marketing and selling the same simple policies.”
The call to action is clear; India must prioritise upskilling at all levels of the insurance value chain, from sales to advanced underwriting.
