In a recent interview, Natraj Nukala, founder of Kshema, a fully digital Indian agricultural insurance company, talked about how his company is leveraging capacity gaps and leveraging advanced technology to We explained to Reinsurance News how we are providing necessary insurance solutions to those who need them.
“There is a lot of reinsurance supporting Indian agriculture today, but it is shrinking in terms of growth. That’s where companies like us come in, where the current reinsurance companies are struggling due to lack of capacity. You’re introducing new premiums into the system that you can’t support,” Nkala said.
Expanding on this, Nkala said, “There is scope for new domestic insurance companies to participate, along with GIC and other global players.” For companies like ours, business and growth will be more efficient if more domestic reinsurance capacity is available. ”
Nukara believes that portfolio diversification and technology are key advantages for investing in the Indian market today.
“India is a large country with diverse datasets,” he explained. “So when we are added to an existing portfolio of reinsurers that have no exposure to India, we can better diversify that portfolio and improve returns. We provide that diversification. Masu.”
“For example, just because there is a cyclone in India doesn’t mean something is happening in the Philippines at the same time. The bottom line is that Indian business can be a great diversifier,” Nucala added. Ta.
Kshema was registered with the Insurance Regulatory and Development Authority of India in November 2022 and was subsequently issued a license. The company’s operations are completely digital.
Nkala explained that the insurer’s model is easy to use, encourages farmers to directly participate in the onboarding process of the company application, and is available in 11 regional languages.
It also has a customer-centric application, allowing customers to decide which natural disasters they want to insure.
Nukala also highlighted the critical role of some back-end technologies, where pricing and loss valuation is done through both API and satellite-driven data sources.
Nucala further elaborated on the technology point, emphasizing that: “Completely digital-driven companies like ours can get PML ratios in near real time. You can analyze and see what your portfolio looks like and how it is performing. Therefore, companies like ours, which are completely dependent and built on an entire technology-driven infrastructure, can increase transparency across their business. Those are two big benefits to think about.”
Of course, India, like many parts of the world, remains extremely under-insuranced, but companies like Kshema are acting as a bridge to reduce the insurance gap that exists in the market.
India as an economy has high purchasing power in the rural sector, which Kushema and others are starting to change, but it has been untapped so far due to a lack of infrastructure.
The two major dangers facing Indian farmers are droughts and cyclones. Kushema is an insurance company for “all natural disaster risks,” and the company has products that cover nine risks with different resolution levels.
Ultimately, Kshema’s goal is to use its deep expertise to help farmers who depend on essentially every regional crop, fruit, vegetable, or spice.