New Delhi: Strengthening distribution network and exercising caution in identifying ways to employ capital inflows from foreign partners are key to boost growth of the industry, says a CII-EY report on the country's insurance sector.
Insurers should embrace the digital space with a resilient cyber security framework to disrupt the traditional business structures, it said, adding that cyber-security is a key risk area for insurance.
Companies maintain information systems for core processes such as sales management system, policy administration system and claims management system, and as a result are one of the prime targets for cyber-attacks.
To improve information security, insurance companies need to develop a strong risk management and governance framework by implementing enterprise-wide security programmes that address processes and controls, privacy and data protection.
"With the passage of the Insurance Laws (Amendment) Act 2015, the longtime demand of having greater access to foreign capital has been fulfilled. This one amendment can be a game changer as it will bring in significant fresh capital to re-energise the sector.
"However, insurance companies must tread with caution and carefully adopt changes to make the best possible use of the opportunities presented," the report pointed out.
It highlighted that skill development at an industry level and better service integration between the insurer and distributors will help in distribution efficiency.
"The Indian insurance sector has evolved and is looking at the future with renewed optimism. In order to realise the full potential, the industry must focus on aspects that will build value for all stakeholders ? customers, distributors, shareholders and the insurers," said Rohan Sachdev, Global Insurance Emerging Markets Leader and Partner, EY India.
"A step-by-step approach must be adopted to build value for customers, the primary stakeholders.
Technology and analytics help to understand exactly what customers want, thereby creating long-term value for customers and earning their loyalty," he added.
