In the past couple of years, the insurance industry has undergone several changes, majorly due to the COVID-19 pandemic. Even though things seem to be returning to normal, the insurance industry must be prepared for the future.

To gain deeper insights, we had the opportunity to speak with Gaurav Chaudhary, Chief Business Officer & Executive Director at Salasar Services.

With over 18 years of experience, he provided us with valuable perspectives on:

• Scaling the insurance industry

• Future trends & challenges in insurance & reinsurance

• Expanding insurance penetration in underserved markets

This interview is part of our #PeopleOfInsurance series, where we share expert insights, opinions, and stories from industry professionals.

How has your journey been as a CXO at Salasar Services?

It has been exciting and fulfilling. This role is very different from what I was doing earlier, but I feel like I fit in well.

Right now, our primary focus is:

• Chalking out growth plans

• Building the right infrastructure

• Expanding our reach into underserved markets

We have big plans, and it has been a lot of fun working towards them.

What is your vision for the next 5-10 years?

Our primary goal is to scale up. However, to reach that destination, we must build several foundational blocks.

Key focus areas for scaling insurance:

Serving the SME & rural sectors:

• Insurance penetration in India is significantly lower than in peer countries like Thailand & Malaysia.

• Large corporations dominate the insurance sector, but the real growth opportunity lies in serving smaller businesses & individuals.

• We intend to expand insurance access to the bottom of the pyramid, where financial security is needed the most.

Strengthening Corporate & Reinsurance Offerings:

• Corporate insurance and reinsurance are our core strengths.

• Our goal is to provide accurate, transaction-focused solutions in this space.

• The key to success is closing actual transactions, not just discussions.

We believe the insurance industry must evolve to serve both large corporations and underserved markets equally.

What challenges has the insurance industry faced in the past two years?

The last 24-36 months have been challenging for the insurance & reinsurance market due to:

• Massive claim payouts from natural disasters & COVID-related losses.

• Premium rate hikes, making insurance less affordable for customers.

• Unrealistic price expectations due to years of rate softening.

Market recovery is now visible, with insurers balancing pricing strategies to align with customer needs.

A new industry challenge:

• Some insurers have adopted predatory pricing strategies, increasing rates when demand is high.

• However, a new wave of discipline is emerging in the industry.

• Balanced pricing is crucial to ensure both insurers & customers benefit.

Beyond pricing, what other challenges need to be managed?

While pricing is a key issue, coverage limitations are also a major concern.

Key challenges with insurance coverage:

Shrinking policy coverage:

• Insurers & reinsurers have become stricter with coverage limitations.

• This affects infrastructure projects like tunnels, roads, and bridges, where full coverage is essential.

Coverage not meeting customer needs:

• Some policies are too restrictive, making them ineffective.

• Example: Hydro-project insurance policies have so many exclusions that they don’t justify the premium cost.

How can we fix this?

• Insurers must step up to support economic growth.

• Coverage should align with the actual risks faced by businesses.

• Knowledgeable brokers must help clients navigate complex policy options.

Ultimately, insurance should be a solution, not just a financial product.

What challenges will insurers face in the coming years?

Top industry challenges:

• Shortage of skilled talent in insurance

• Fluctuating pricing & market discipline

• Encouraging innovation & customer-centric solutions

Talent will define the future of insurance.

• The insurance industry is not the first career choice for many professionals.

• The industry must attract skilled talent to drive future growth.

• Quality professionals will reshape the trajectory of insurance over the next 10-20 years.

Without innovation & skilled professionals, the industry cannot evolve.

What future trends should the industry watch for?

Key trends shaping the insurance industry:

1. Digitalization & Technology Adoption

• Compared to banking & fintech, insurance still lags in digital transformation.

• Digitizing insurance distribution & services will improve accessibility.

• Fully digitalized processes can help penetrate insurance at a grassroots level.

2. Insurance-Linked Securities (ILS)

• Countries like Mexico have introduced ILS (insurance-linked securities) to cover natural disaster risks.

• India will eventually see ILS adoption, providing an alternative to traditional insurance.

• ILS works like bonds, allowing insurers to raise funds for large-scale disasters.

3. Increasing Need for Reinsurance Solutions

• As India’s economy grows, corporate & infrastructure risks increase.

• This will lead to higher demand for reinsurance solutions.

• Advanced risk management tools will be needed to navigate future uncertainties.

Innovation & new financial models will define the next decade of insurance.

Conclusion

Key Takeaways from Gaurav Chaudhary’s Insights:

• Expanding insurance in SME & rural markets is critical for growth.

• Reinsurance & corporate insurance must evolve to serve modern risks.

• Balanced pricing is essential to prevent customer affordability issues.

• Coverage should align with actual risks, not just standard industry limitations.

• Digitalization & alternative risk financing will shape the future of insurance.

Final Thoughts:

The insurance industry must focus on customer needs, innovation, and sustainable pricing to thrive in the coming years.

Thank you, Gaurav, for sharing your insights with us! We look forward to seeing you on #PeopleOfInsurance again.