“More the Competition, More the Innovation”: Video of Fireside Chat with Ms Girija Subramanian, CMD, New India Assurance

At the conference on ‘Cargo Corridors: Moving SMEs Forward’, in Chennai, recently organised in Chennai by SME Communities, in association with FIEO, Ms Girija Subramanian, Chairman and Managing Director of The New India Assurance Company Limited (NIA), outlined how India’s insurance sector is evolving to meet the demands of small and medium enterprises (SMEs). In conversation with Dr. Ravi Seshadri, the renowned industry expert and strategic advisor to global Insurance & Insurtech companies, she addressed regulatory changes, challenges in claims settlement and the importance of product innovation in widening insurance penetration.

Competition and Innovation

On the government’s decision to raise the FDI cap in insurance to 100%, Ms Subramanian said the move will accelerate India’s ambition of becoming an “insurance for all” economy by 2047. With global insurers expected to enter either independently or with Indian partners, competition is set to rise.

“More the competition, more the product innovation,” she observed, adding that new entrants will expand the industry’s capacity to serve under-penetrated segments such as SMEs and women entrepreneurs.

Bridging the Perception Gap

Despite growing activity, many SMEs continue to believe that insurance products are not designed with them in mind. Ms Subramanian countered this perception, pointing out that insurers are adapting portfolios regularly.

“As an example, we launched a new product targeted at women entrepreneurs this year on International Women’s Day,” she said. The real challenge, she stressed, is ensuring that SMEs are aware of these offerings and engage proactively with insurers to shape more relevant solutions.

Claims and Transparency

For most SMEs, the biggest concern remains the claims process, often described as difficult or time-consuming. Ms Subramanian acknowledged the frustration but attributed much of it to mis-selling and lack of awareness.

“MSME entrepreneurs often have low familiarity with coverage details. That gap leads to disappointment when claims arise,” she said. Recent regulatory measures are seeking to address this. The Insurance Regulatory and Development Authority of India (IRDAI) has mandated that every policy be accompanied by a Customer Information Sheet written in simple language, laying out key terms and conditions.

Ms Subramanian emphasised that while insurers must disclose clearly, clients also need to study the documents before deciding on policies.

Lessons from the Chennai Floods

The conversation turned to the catastrophic Chennai floods, which hit enterprises and households hard. Ms Subramanian underlined NIA’s response: “We handled around 6,000 claims across property and motor insurance. Over 99% were paid. Only the remaining 1% could not be processed due to incomplete documentation.”

The experience, she suggested, is evidence that timely claim settlement is possible when insurers and clients work within a framework of preparedness and compliance.

Preparing for New Risks

As SMEs digitise operations, cyber risks are fast becoming a priority. Ms Subramanian said NIA has developed cyber insurance products tailored for SMEs, accessible through its website, field offices, agents or digital outreach channels.

Another area of innovation is parametric insurance, which pays claims automatically once a predefined trigger—such as a weather threshold—is breached. Ms Subramanian explained NIA’s “Nischit Suraksha” product, which relies on data from third-party agencies like the Indian Meteorological Department (IMD).

“Once the threshold is met, the entire sum insured is paid out digitally, with no need for additional proof,” she said. Industrial clusters such as Guindy, Ambattur and Sriperumbudur could benefit significantly if associations adopt such covers on behalf of their members.

Demystifying Insurance

For Ms Subramanian, the larger task is to reposition insurance in the minds of SME owners. Too often, it is viewed as a cost rather than a financial safeguard.

“Insurance is unlike any other financial product. It is a risk-transfer mechanism where the losses of a few are shared by the contributions of many. Catastrophic perils and unforeseen losses can be devastating for SMEs unless they are covered,” she argued.

Misinformation and low awareness, she added, continue to restrict uptake. Insurers, regulators, industry associations and platforms like SME Communities therefore have a role in demystifying the product and underlining its economic value.

A Sector in Transition

The discussion highlighted an insurance industry in transition—expanding capital inflows, deploying digital innovation and aligning with regulatory emphasis on customer centricity. For SMEs, the message was clear: products are evolving, claims processes are improving and new categories of cover such as cyber and parametric insurance are becoming available.

The onus now lies on entrepreneurs to move beyond a cost expense mindset and see insurance as essential risk infrastructure. For insurers, the priority is to continue simplifying products, deepening awareness and strengthening trust.

As Ms Subramanian summed up, widening insurance penetration is not just about meeting regulatory goals but about protecting the foundations of the economy itself.