India’s Insurance Gap: Generali Central Life’s Vision for Protection

You're listening to a Mint podcast, brought to you by HD Smartcast. Hello and welcome to Why Not Mint Money, your go-to podcast for personal finance. I'm Ava Andabhash and today we're talking about something India says it wants but still doesn't fully commit to real financial protection. Here's the truth, India's overall insurance penetration is just 3.7% and life insurance penetration is 2.8%. That means for every hundred rupees we produce as a nation, barely three rupees goes toward protecting our family's futures. At the same time household vulnerability is rising. Medical inflation is higher and the average Indian's insurance spend is far below what a financially secure family needs. So today we are asking the questions that matter. Why is India more aware? But still under protected, why do we buy insurance late, buy too little and almost never reassess it as life changes? And to unpack this with clarity and depth, we are joined by someone who has been shaping the conversation around insurance protection for over 25 years. Mr. Aloo Karungta is a managing director and CEO of Generally Central Life Insurance Company, a seasoned leader with global experience across India, Hong Kong, Philippines and other Southeast Asian countries. He has been instrumental in transforming Generally Central's vision into a true lifetime partner model. Under his leadership, the company has driven digital transformation, reimagined customer engagement and built a high performance culture that actually puts people at the centre of protection. So let's get into it. Thank you so much Mr. Rungta for being with us today. I want to start off by talking about the big pictures I highlighted. The fact that insurance penetration in India has now declined to 2.8% of GDP in 2324. That was down from 3% to the previous year. Why is it that we are seeing this paradox of rising premiums but falling penetration in the country? Is there some structural factor behind it you think? See if you look at it in the last 2-3 years, life insurance has gone through lot of waves. There have been structural changes and also there have been regulatory and tax changes. I think it's just a small phase where the industry is correcting itself and also doing some course correction to see how do we actually do leap in bounds. For example, there were some changes in the UM norms. Recently we had a GST change. So the frequency of change is also high while most of them are in the interest of customer like surrender charges change happened one and a half years back. So industry is going through the settling time. That's my first view. Second, what we also see is as you rightly pointed out, there is more awareness compared to what it was in the past. Still we find that the awareness has not reached every part of the country. So what has happened is the where people are more say metro, stair ones. Now the ticket size of these people have gone up but the number of people buying are not coming to the fold. In fact, we all life inshawters in the life console also are trying to make a concerted effort. How to increase awareness? So we'll see there is a campaign which is running like sub-separally life insurance, which is done by the life console. Second, a lot of us are now look at how do we vote tier 2, tier 3. Yes. The good news is compared to say a decade back, disposable income in those parts of the country has gone up. There is a mindset to buy insurance but I think still there is this mindset of procrastination still happening, we'll do tomorrow or we'll do day after. I think that appreciation, that the commodity risk category is important. We need to act ASAP. That urgency is still not there. Also remember we are in the same financial instrument bucket. So there are a lot of financial products. The younger customers, you will read a lot of stories about the people participating in many exotic products and burning their hands as well. So I think that's where insurance has not met in roads. But we do believe with a lot of government schemes and therefore which industry is trying to do. This is a temporary phase. I call it a blip on the downside. If you look at last 2 months data, that is something which is coming back on track. Okay. Last 2 months data is increasing at the end of the level, some are doing much better than others. So I think it's just a phase. Okay. And we should be back on track to achieve the vision of insurance for all by 2047 which is a larger vision across the country along with the regulator. And sometimes we feel actually we can achieve it earlier as well. So the vision of Vixil Bharat by 2047 is also aligned with the vision of insurance for all by 2047. And I personally believe that we are on track. And there will be temporary options and downs. But I think we should not be worried about meeting that target on time. Okay. Great. So you call this like a temporary blip and you said that there is that mindset of procrastination. So that's what I wanted to sort of just focus in on because I think a lot of people still treat the cover like a February march tax chore. So what is the numbers really showing about how Indians are actually buying their first policy? How much of a cover they're picking? How really do they update it? And you know we were talking about this buying late and buying too little. So how much is a family actually losing when it comes to financial security by doing this? Okay. So all good points to be honest. Yeah. We have a traditional mindset when insurance was bought only for tax purposes. Hence at February march here or that February march hangover is very very strong still. These two months may contribute say 30% of our full year business. Okay. So there is a disproportionate calling for insurance to be bought at that time. Also a general realization that when people buy generally people are buying in say late 30s. How much they buy they would buy maybe a five or six multiple of the sum in short. Right. So A I think it is a bit late because generally in the Indian context late 30s means generally I'm saying okay. Yeah. You are a married family. You might have wanted to kids also. So you're only late in your financial planning and financial risk management. So remember we are part of the same financial planning and financial risk management market. Second a five six multiple of need is also too less. Okay. Now it goes back to the first point that are we the first in the recall of the family that this is one category which is beyond financial planning and actually the only category which will financial protection. As indents we are having some oriental savings which actually with the younger generation is also a challenge to be candid. It's more a spend economy now. For sure. We were a savings economy more in the past but the risk management aspect is not strong. So ethnicity and culturally we are very positive ethnicity right. We don't look at risk what can come tomorrow and that orientation to plan for it in advance is not high. We are some people we are people like you know we will manage it's okay and more positive looking so that positivity even us is great right. The aspirational outlook on growth is great but we should also realize we are living in circumstances today which are more uncertain than they were used to be right. The need of the art is also high cost of living has gone up right. Because of the healthy environment your life expectancy has increased. So you need to live longer even if you retire you know the time gap between retirement and your end of life is also projected to be going high. So you need to plan ahead. Now that realization is not deep in the country. So that's one area where I think collectively awareness on financial planning and risk management has to grow a lot. We are trying to do our bit into it but I think it's a collective effort. Yes. If you look at curriculum wise also right. See you may come from an art field you may come from a science field you may come from any field but everybody has to do financial planning. Yes correct. But I don't think still in a basic curriculum financial planning is a subject. Yes you're right. So some of these aspects are not taken seriously. So what happens is youngster. I have never been told unless my father has pushed me to do something. So those things are not built in a society and culture as we are living. Yes. Hence the adaption is taking a lot of time than we are what we are. You really touched upon a very important point maybe instead of the algebra we should focus on it. Some of it. Yes. Some of it of course. Like you said but do you think that if we reframe it as income continuity rather than policy ownership that maybe the mindset would change what do you think needs to be done in terms of communication in terms of distribution that will actually change the mindset or help change the mindset of the 140 million plus households here. Definitely there is a need to simplify. Yes. Simplify the word. We insurers have also made a live difficult. Let me put it this way. We use a lot of technical jogger and set time. And in ordinary citizen or ordinary consumer we will not understand it. I was in a forum yesterday. And we are discussing a product called critical illness. Someone was asking sir what is this product? So there was an eloquent lady explaining in our own way technically it's an income replacement product. So I had just tripped in you know because I said let's explain what does it mean? So I said in that if you are critically ill right there are many things which happens or a person goes through when he or she is critically ill right. What is a hospitalization video? Now that is covered by a medical insurers but critical illness means you are having some really serious illness. Now some of this illness actually can limit your earning capability in future. Also many times there are a lot of pre hospitalization and post-osploration expenses which your medical will not cover. So CIR Ider is actually in a way a lifestyle replacement product. Okay. See even if you are critically ill post a treatment you still want to maintain a certain lifestyle right from an income generation point of view or the way you live. This product gives you a lump sum amount right. It's like you get a one crore income or a five crore cover and it's lump sum on detection of illness. What treatment to take is irrelevant. So suppose I have taken a cancer cover I have with detected cancer a report says the guy is a dead cancer. So we are obliged to pay him or her a lump sum amount of cover she has taken or he has taken one crore five crore. Now what you do with that is none of our business. God it. Obviously the treatment when you get hospitalized is going to take it to a medical. Okay. But this money is available you to ensure that your life style the way you live your post-osploration pre-osploration cost is taken care. Your needs are taken care because this means impact or ability to earn. So these kind of communication are more important than telling this product is this, the category is this because ordinary consumer doesn't understand sometimes. So a lot of time we say the proposition which goes in the product is more important than the product itself. Absolutely. Okay. What is said is a proposition. So please define the proposition in the language the customer understands not in the way we understand it. Yes. Absolutely. I think simplifying it is absolutely critical. And then when we look at it from a budget standpoint what would you say is on the wish list from a budget standpoint and what would you argue is needed for long term protection and retirement planning and really expected rather than that rushed ETC that everyone does. See if I can be very frank. The way also the taxation has happened in the last few years. The category has not been very easy in the sense that when you will move a lot of text benefits, the traction of February and March is also coming down. Now if you believe this is not necessary a saving category but a protection category then we should look at differently from a text benefits also. Okay. See while there are some products which compete on FDs, there are some products which compete with markets but can you do differently something for the protection piece. However recently to be fair the government has reduced the GST on that category but I still believe if you incentivize people for the right behavior. See here we are saying about behavior. What is human behavior? How are they prioritizing these things? Do they understand these things? In India people do understand tax. Tax has always been instrumental in driving people in savings and many things. Whether you like it or not. If tax is an instrument which can drive behavior and we think we need to have educate, protection in the country to ensure that the households are not weathered with untimely challenges or issues, do something more on that category. We have been having tough time with the other categories also. So if there is something different done on the tax side to insure those people I think it will work a lot. Okay. So if you look at our ecosystem and our stakeholders we have distributors, we have customers and we have employees. Right. We are on the shareholder which is obvious. Now the point is can we be like the people who are in the country and we are not going to be in the country. We are going to be in the country and we are going to be in the country. Now the point is can we be like the partner for each of these stakeholders. Right. For my customers what does a life partner for a customer stands for? If I have a customer do we understand the need of the customer and then there are multiple needs. Like you started saying people start with a low cover. So are you going back to the customer over a period of time in saying hey listen you want a policy with us thank you but we see that you are not adequately insured. Right. There is a life value which evolves. Your unoccupability changes. Your need of a family changes the family composition changes right. So in a life cycle your need for insurance also keeps on evolving. So can we at various stages of a life cycle be in touch with the customer keep him or are engaged and keep on offering him solutions say okay now that you are your suppose you are your father's own or mother do you want to plan something for a kid for future. You are entering at age where you start thinking about retirement. Can you proactive go and say do you have your thought about the retirement solution. Yes. Right. So that's partnership. So if you change from one transaction of selling one policy to look at a customer life time value so we actually internal major metrics call what is my customer life time value with me right and are we able to engage more and some of our teams are tasked on that that for each customer are we engaging and increase the life time value with the customer. So that's one of the tenets for life time partner right. Similarly for distributor again easy coming to sell one policy and make commission or is going to be with us for long or distributor which stays with us long also ensures quality of business and continue the business. Okay. So life time partner is not one phrase but we will look at each tenet safe for employees. My employees are my biggest assets. Correct. See now business I keep on saying we are in the business of managing people. I have actually know the job. Unlike other industries I have not look at raw material management. I don't have to do anything on supply chain. Yes there is some technology but I am not building some asset technology here. What is my role or our role. We have now we have almost 4,000 employees, 80-20,000 agents, partners, distributors. So the entire piece is about people management. Correct. Right. How can we engage, motivate, get the best out of them. fulfill their ambition. Are we with them in their own career management. Right. So the first philosophy are we giving a job or are we giving a career? It starts there. Correct. And that's where also the young generation have to be educated. Again, mentored and coach. Yes. Now these things are not. It's better nowadays. They are much more intelligent. They are much more informative than we were at our time. But still I think the basics of finding a job or something for a career is not well particularly in any curriculum. Correct. So that's where partnership starts. Right. We run some programs like we have a program called Win. We just call women in short. Okay. What are we doing there. We are hiring fresh MBA graduates, female graduates. And we do a complete training with them of campus to corporate. Okay. Because they are so fresh. But a lot of energy, a lot of passion, right. Yeah. But we need to train them on the basis of corporates. And at that stage of life. At that stage of life. So I think in that sense that partnership, right. Okay. How do you talk, how do you appear. Yes. You know, how do what is a vocab. Right. So that's a long curriculum which you know, six months parallelly. Lovely. Right. To corporatize them because they have come. And these are mostly what we have also targeting tier two. And you know what we have done with them. We have also understand that this is their gig. Yeah. Right. So they have been given their personal Instagram handlers. Oh. So that they create reals out of it. Okay. And look at how do we pursue the younger generation or the generation which is an Insta. And persuade them to buy insurance. Got it. Okay. So again, I believe that's partnership. Someone who is new, fresh. Hmm. See normal, conservative management training has been there for long. Correct. But this is very fresh. Hmm. Right. And also women. So I believe the woman power is also underuclase in the country. So women, digital, young, we're trying to test a lot of tenets. Yeah. Okay. I don't know what works over a longer period of time. But that's our sincere commitment. Okay. That what we can do, the people who wants to join the category. Yes. And then to be successful. Okay. Okay. So a lot of endeavors. And like you said, it's a lot of people management, which you of course excel at. And given where we are at right now, the current market indicators, what are the top three factors that generally central must act on right now so that you actually convert this consumer intent into long term meaningful protection for Indian households. While it is said a lot, but not done as much is hyper personalization. Okay. I think that's in every category but one hundred percent. And you will hear this cliche being said a lot also, we can't date. But I still believe in insurance, it's not done as much. What is my custom category? Who is my customer? Where is my customer? A Indian in tier two is different from Indian in Metro. Same age. Baby same occupation also. So a professional, you are a professional there. So you won't find professional differences also. Age difference also but definitely he or she is different. The way they live, sometimes the value system, sometimes the surroundings. So the hyper-personalization is definitely important. If you really want to capture markets and go deeper in the segment. That's one. Now the second part is limited to the first part is how do you do that? You have to use AI a lot. I am a big believer of AI. If you don't embark on your journey today, you are already late. You are already late, believe me. It is so much happening. Obviously, when it has to be smart and sharp, you see what AI brings it for us. There is a lot of hogwash also around it. And you can get easy loss and confused. Easily I am telling you because it's so new. A lot of us don't know. We are just beginning there but I think the bus is missing if you are not on it. That's definitely very important. Third thing is I will go back to the poniesa simplification. If you really want to reach each and every part of the country. We want 1.4 billion people to be in short. Can you simplify it to them? Personalize? Simplify. I believe technology is the means of the egg. To reach them because reaching every part of the country is also not easy. Today technology is available and people are on smartphones. It's our 11th finger. Correct? Now, are we used the most? My point is if they are on a platform, why don't we use it to reach them? I think this thing will be my top of mind. Now, Mr. Rungta, before we let you go, we have a rapid fire round. You are not getting a hamper at the end of it but it's still a rapid fire. So what is the one number you think that Indians need to know before buying life insurance? Let me look at differently. In so-of-a-number, let me put a word. The word is your now. Can you buy or look at it now? That is right. At least start. I know we discussed that 6-minute-difficult and 10-minute-difficult. But start something because financial planning, risk management is not done tomorrow. It is for tomorrow. I say, "You are now." What comes to your mind when people say, "Because myth about life insurance, you think needs to be busted." One word. I think as a myth, people think it is not important for me. I am immune. Nothing is going to happen to me. As I said, Indians by nature are very positive. It is good. But we sometimes believe, "I don't need it." Even if we look at the health, we all went through a tough time and we go, "Right?" But we still believe, "I am okay." "I will be okay." "Right?" It is for him or her. So I think that is also an attitude which has to change. One behavioral shift, you think that is needed that will shrink India's protection gap. Please see it as something which can secure your future. And not only your future, your family. So it's more a security net. Rather than an investment too. So most of the tax planning part and all we discuss was more for investment tool management. My request is look at a security net rather than investment. Digital or human? What is going to drive the next big leap in protection? So we use a very profound combination called physical. You will need to have physical as well as digital combination. Because for driving digital also, you need human intelligence. So I think the world I will use is physical. Digital. Okay. And for a 30 year old who is listening to you today, what is the one thing you think they need to do to secure their future? Please sit with someone who can explain new financial planning for your future. Or watch this episode. Okay, lovely chatting with you. I think this is a very powerful conversation Mr. Rung, actually showing us that financial security is not just built in the time of crisis, but it is built much before that. Thank you. All right. So that brings us to the end of this very powerful conversation. And I think today we've heard the numbers, but we've also heard the solution. Simpler products, clearer guidance, faster claims, and long term thinking, and the shift from buying a policy to actually protecting your income and protecting the people that you love. Mr. Rung, clearly broke this down with such clarity. And let's also thank General Lee Central Life Insurance Company for all the work that they are doing to reimagine what a lifetime partner looks like for India. To everyone listening, your money stories matter, your protection matters, and your family's future deserves more than just minimum thinking. Until next time, stay informed, stay intentional, and as always, why not mint money? This is Avan the Bhat, signing off. To stay updated on this podcast, follow us at HD Smartcast on all the major social media platforms. To listen to more such podcasts, log on to www.HDsmartcast.com.