India has implemented insurance regulatory changes at a pace that would have taken Europe decades to accomplish, according to Theodoros Kokkalas, chief operating officer of ERGO International. Speaking in an interview, Kokkalas described the direction as positive but emphasized that insurers require greater certainty on the timing of future regulatory changes. The market and regulator must find the right tempo and balance to ensure sustainable growth in the insurance sector. "The changes in regulation that happened in India during this period took decades to happen in Europe," Kokkalas said, adding that regulators need to give insurers time to adapt to new rules. Greater predictability would help insurers make long-term business plans, as Kokkalas noted that "making plans, and today making long-term plans is like science fiction in the dynamic environment that we live in."
India's general insurance industry continues to struggle with bringing its combined ratio below 100%, with the industry average currently at 110-115%. ERGO International is targeting a significantly better ratio of 80-85%, though Kokkalas acknowledged there is no standard timeline for a market to reach that level. "There is no standard timeline for a market to reach a combined ratio of 85%," he said, noting that profitability depends on market maturity, competition, volatility and regulatory oversight. ERGO is focusing on underwriting, pricing, claims handling and cost discipline to improve its performance, while using AI to improve efficiency.
ERGO expects growth of 6-10% through 2030, with significant contribution from its US business, ERGO NEXT. Kokkalas noted that smaller businesses in the US remain underinsured despite high overall insurance penetration, presenting growth opportunities. India ranks among ERGO's top five markets globally, driven by size, growth prospects and low insurance penetration, though expanding coverage will depend on rising incomes. The group expects to grow faster than the market in most of its countries, with India being among the key markets for sustained expansion.
ERGO holds a 49% stake in HDFC ERGO and expressed satisfaction with the existing partnership, despite regulations allowing foreign insurers to own up to 100% of an Indian insurer. "We have a very constructive and fruitful cooperation with HDFC for 18 years," Kokkalas said, stating they want to continue growing in alignment with their partner. "I would like to continue this cooperation as long as I live. We want to grow, but we want to grow in alignment with our partner. We are married," he added. Any future decision on ownership or expansion into other businesses would need to be aligned with HDFC. An initial public offering of HDFC ERGO is not part of ERGO's plans, as the company does not currently need capital, with Kokkalas noting that "there are different reasons to go public, one of which is when you need capital. We are not in need of capital."
