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Sandip Bhadury On Ga Insurance Limited – Kenya, Tackling Insurance In The Time Of Pandemic

Sandip Bhadury On Ga Insurance Limited – Kenya, Tackling Insurance In The Time Of Pandemic











His passion for the insurance industry stemmed as early as the year 2006 and that his expertise transcends continents such as Asia, Europe and Africa. The CEO of GA Insurance Limited – Kenya – Sandip Bhadury has vast experience is managing corporate broking and risk advisory business as well as executing technical renewals and new placement plans. In this interview, the straight-to-the-point professional speaks of the critical role insurers play in the Covid-19 pandemic, how the insurance industry has been affected and how GA Insurance has strategically introduced its newest product –  The GA Smart Travel – Outbound Package.

Read on …

Sandip, you are the CEO of GA Insurance and have been in this insurance field from 2006. Tell us about your vast experiences and what keeps you so passionate about the field?

I started my career designing electronic circuit boards in IIT Guwahati, worked as an engineer for one of the biggest telecom companies in India and sold industrial automation equipment for two MNCs before joining the insurance industry. My work experience in insurance covers all facets of short-term insurance across India, UK, Papua New Guinea, Mozambique, Swaziland, Rwanda and now in Kenya. I was also involved in the build-up of start-up insurance companies including two in non-English speaking countries in Africa.

One of the interesting aspects of this field is that at one moment you may be sitting across and discussing with a group of experts a complex risk like power plant and at very next moment, you may be negotiating a deal worth few thousand shillings with a retail or an individual client. This wide variety of human interactions makes one’s life experiences much richer. When life experiences are richer, passion follows.

The biggest satisfaction is when we make the claim payments to an affected client making good of losses when he or she is affected by an unfortunate event of loss. This opportunity to contribute during the time of loss and be a friend in need drives us to be passionate in what we do.

As GA Insurance, what have been the implications of Covid-19 for the insurance industry?

In GA Insurance, we are lucky to have a wonderful set of clients and broker partners. We have worked together to cope with the crisis. Hence, our business has not been affected as yet and have been able to deliver growth at around 20% till June. However, we feel the worse is yet to come. So next 90 days is quite crucial for us. Things may go either way.

From an industry point of view, we are affected in the same way as the economy has been. The cash crunch in the economy has resulted tightening up of cash flows which has affected our premium collection. Slow premium collection means less money available for investments and increased provisions with respect to IFRS 9 compliance. The industry is also experiencing pressure in most of the lines of business. This has a direct impact on the loss ratios. Certain business segments like hospitality and aviation has been adversely affected. Our travel insurance sales have come to a grinding halt. In many cases, fleets of motor vehicles and aircrafts have been grounded. Motor insurance which constitutes a signification portion of the insurance business has seem a reduced offtake due to low demand of new vehicles. A reduced workforce also had an impact on our Workmen Compensation business. Primarily, as in industry we facing demand side issues.

The industry also has experienced sudden spike in claims inflation in our medical business because of additional costs associated with Covid-19 eg cost of PPEs, diagnostic tests et cetera.  Cost of treatment higher especially for members with underlying conditions. Overall, this will result in hardening of reinsurance costs and conditions.

When the crisis hit, did GA Insurance receive overwhelming feedback on general queries over their life, health and non-life covers? And how did you and your team respond to this?

Yes, we received and we are still receiving a lot of enquiries on a daily basis. GA team has invested a lot of time in explaining the terms and conditions of the insurance contracts to the clients. We are trying our level best to be accommodative under the prevailing conditions.

Why is insurance now most important than ever before?

Insurance is risk transfer mechanism. The Covid-19 crisis has once again exposed us to volatility we face on all aspects of life. Hence, insurance is more important now as a coping mechanism to uncertainties that we face in our business, livelihoods and individual lives.

What have been some of the challenges you have encountered during this time?

As I mentioned earlier, we faced the same challenges that economy and the industry faced. Some business segments like hospitality and aviation had been adversely affected. We experienced zero sales in our travel insurance business after the international borders wwere closed down.

In a time where, businesses have had to evolve and rethink their strategy to stay afloat during Covid-19, has GA Insurance also tweaked their product listing to better serve Kenyans in this time of financial strain?

I would say, this crisis has actually made us rethink on way we actually conduct insurance business. Yes, we are on the product development to address that need. To start with, we have tweaked our Outbound Travel Product to Covid-19 related expenses if you get infected with Covid-19 during a trip abroad.

We are also working on products purely meant for digital distributions without any human intervention. Some of the products are on developmental and regulatory approval stages which we will unveil as soon as the development cycle is complete.

From getting tested to self-quarantine, to hospitalisation bills – which are further exacerbated by being laid off, put on unpaid leave or having salary cuts– Covid-19 has proved to strain the pockets of Kenyans. The question begs, are insurance companies covering the Covid-19 financials and to what extent?

The coverage of Covid-19 as a peril is dependent on the insurance contract signed. Hence, I would urge you all look into the insurance contracts and consult with your respective brokers on that. In GA, we have taken exceptional steps to facilitate our clients on Covid-19 treatments in our medical insurance policies. It is important to note that pandemic and epidemics are an exclusion in most of reinsurance contracts globally.

How has GA Insurance strategized for the longer-term effects of Covid-19 which are continuing to unfold?

Kenya had its first Covid-19 detection on 13th March 2020, there was an apprehension of impact from January itself citing conditions in Europe and China. The first impacts of supply chain disruption were visible by mid-January. At GA we had started taking mitigation measures right from that time itself in terms of underwriting quality and pricing discipline. We have worked closely with our clients and broker partners in arranging and facilitating premium finance wherever necessary. Till now things have worked for us, however, the situation being so unprecedented, it is not possible to conclusively assess the long-term impacts of Covid-19.

We have done various scenario analysis and had a relook on out coming three year’s strategy. I can say we have embarked on an innovation led growth strategy.

As at 1st August, 2020 International flights are slated to open and it is at this time that GA Insurance will be unveiling their newest product – The GA Smart Travel – Outbound Package. Tell us why this scheme will appeal to people and what it will offer?

Due to the global pandemic and the need to facilitate the travel needs of our clients during this difficult situation, we, at GA Insurance Ltd, have made the decision of exceptionally cover medical expenses abroad as a result of Covid-19 infection during a trip abroad.  The inclusion of this benefit will definitely appeal people to purchase our travel policy since they will need to be protection in case, they get infected while travelling. It has also become a requirement when applying for visa for most countries.

What happens to your existing policy holders, have you incorporated them with them new product?

The existing policy holders are encouraged to purchase new policies if they would like to be covered for Covid-19 medical expenses abroad. Policies purchased before will not include this cover because we did not have this facility ourselves and it is not possible to expand the scope of the policy retrospectively.

Any final message to our TAW readers?

I would urge all TAW readers to look at insurance as a risk transfer system which is an essential element of doing business and a coping mechanism in case of unfortunate event of loss. The test of an insurance company comes when it pays a claim. Hence, evaluation of insurance company becomes essential before placing a risk. It is important to ask if the insurance company has the ability to pay the claim (especially the large ones) as well as intention to pay the claims. How strong are their balance sheets? Hence, price should not only be the factor for choosing an insurance company. GA Insurance is the sixth largest insurer in Kenyan market and has posted consistent Underwriting Profits over the years. In 2019, we have delivered the highest Profit Before Tax and second highest Underwriting Profit in the industry. This shows strength of our balance sheet. Our Financial Strength has been rated as A+ by GCR, which is among the highest. We are also largest Fire Industrial Insurer not only in Kenya but in entire East Africa. Hence, we had our share of large claims which our clients will vouch for in terms of our claims paying ability and paying it fast.

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