Budget 2020: Reaction of the insurance industry

“The budget attempts a balancing act of promoting long term growth while maintaining fiscal prudence given the constraints. It pursues long-term measures towards infrastructure development, higher education, technology adoption, etc. which is positive. For the non-life insurance industry, higher spending on infrastructure i.e. roads, airports, water pipeline networks will drive demand for re and engineering covers. Health insurance coverage should get a boost given the focus on expanding the hospital network for Ayushman Bharat. The capital infusion in the state-owned insurers was necessary and will hopefully encourage better underwriting discipline in the future.”   Bhargav Dasgupta MD & CEO, ICICI Lombard General Insurance     “The Union Budget indeed as assured by the Finance Minister will lead to inspirational India, economic development of our country, and caring society. Through this Budget, the Government has focused on infrastructure, rural growth, and encouraging the use of technology and generating employment which in turn will benefit the economy. I firmly believe that kind of healthcare facilities in a country determines the life expectancy of its citizens. By setting up viability funds to develop and impanel more hospitals in Tier II and Tier III cities through PPP model under AB-PMJAY and allocating Rs. 6,000 crore for the same, will allow beneficiaries to access quality medical treatment. Thus, providing a much-needed boost to the penetration of health insurance. Additionally, by proposing this optional new personal income tax regime, the Government will be putting more money in the hands of people which should boost consumption.”   Tapan Singhel MD & CEO, Bajaj Allianz General Insurance     “This is a “Langhe Raho” Budget as there were no quick fixes or grandiose plans but lots and lots of initiatives which will all help keep the economy on course for the 10% realistic Nominal GDP growth planned. Big spend push through National Infra Pipeline, Transport sector, and 16 initiatives on Farm growth should help rural economy and growth. Fiscal deficit at 3.5% for Fy 21 is a relief as we stay the course and yet spend extra within limits. Disinvestments target of 2.1 L cr will have to be met through LIC, IDBI, etc. Overall, time to switch of TV Channels and go back to the hard grind of execution to get the economy on track. So, as we chase the 5 in GDP target, its ‘Lage Raho’ for now.”   Mahesh Balasubramanian MD & CEO, Kotak Mahindra General Insurance Co     “In a challenging economic environment, the Finance Minister has presented a pragmatic and well balanced- growth-oriented budget, with something positive for everyone – for individuals to companies; from farmers to corporate houses, thereby benefiting various sections of the society. The noteworthy initiatives across various core sectors of the economy such as health, education, agriculture, irrigation, infrastructure, among others will act as enablers in providing a thrust to the Country’s economic progress and aid in achieving the expected GDP growth of 6-6.5 percent for 2020-21.   Roopam Asthana CEO & Whole Time Director Liberty General Insurance     “The clear focus of the budget is to make healthcare more accessible with increased infrastructure, as the investment in the healthcare sector has gone up from the previous year. The expansion of the Ayushman Bharat Scheme is another big step to fulfill the need gap in secondary and tertiary care, especially for the economically weaker sections of society. The scheme has benefited many people since its launch who needed medical care however, it didn’t have adequate funds to support. Ayushman Bharat scheme has also played a huge role in increasing awareness and acceptance of health insurance amongst all sections of the society.”   Ashish Mehrotra MD & CEO, Max Bupa Health Insurance     “Listing of LIC is a good move which will bring focus on the life insurance sector, other expectations of the sector could have been met better. The insurance industry will be watchful of the implication of the direct tax changes in the new tax regime.”   Kamlesh Rao CEO Aditya Birla Sun Life Insurance     “The allocation of Rs 69,000 crore to healthcare will enable further reforms in the sector, and create employment opportunities. The larger focus on Ayushman Bharat and Mission Indradhanush will increase access to quality healthcare services, particularly in Tier II and III cities. The government’s move to expand Jan Aushadhi Kendras will make medicines more affordable and will certainly improve health and longevity in the country going ahead.”   Prasun Sikdar MD & CEO, ManipalCigna Health Insurance     “Taxing dividends in the hand of the investor may have a marginal long-term impact on REIT and InVIT valuations. No significant incentives for infrastructure and real estate is a disappointment. The outlay for rural and Agri sectors is less than expectations. The budget reflects the constraints of the sluggish economy within which FM has had to operate.”   Mihir Vora Director & Chief Investment Officer Max Life Insurance

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