 "Don't see fall in premium growth post enforcement of new rules: V Manickam")
Life Insurance Council, the industry body of life insurers in India, is making attempts to ensure that the interests of the companies are safeguarded and is now in the process of launching an all-India syndicated survey which will bring out customer satisfaction scores for insurance products. In an interview with M Saraswathy, V Manickam, Secretary General, Life Insurance Council talks about this initiative and other strategies for growth. Excerpts:
Life Insurance Council is planning to have a customer satisfaction survey. How will it help?
Presently, there is no feedback mechanism in the life insurance industry to gauge the customer perception about products and services of the industry. Hence, the council has decided to bring out a survey to get an idea of the customer's satisfaction. We have prepared the Request for Proposals (RFP) for this project and will then short-list consultants for the process. Given the size of the project, we may need more than one consultant.
Since the life insurers are entering into a new phase from October 1, do you anticipate a fall in new business premiums?
Life Insurance Council has estimated life insurance industry to record a CAGR of 12-15% over the next 5 years. This growth expectation is based on multiple regulatory and industry changes brought over in the past few years as well as the favourable demographics of the country. Favourable Indian demography – insurable population, expected to grow to 75 crore and life expectancy to 74 years by FY 2020, would help achieve spurt in the preference for Life Insurance.
While the new traditional product guidelines will be implemented from October 1, since the products will be more transparent in nature, we believe that there will not be any fall in premium growth. We expect the penetration level of life insurance industry to grow from 3.2% to 5% by year 2020.
But, will the insurers need more time to refile their products?
Life Insurance Council has asked the insurance regulator for an extension in the deadline for implementation of the new traditional product guideline. From October 1, life insurance companies cannot sell products that do not conform to the new product guidelines for traditional products. We received a representation from the life insurers to extend the deadline so that they have adequate products in their portfolio. We expect a positive outcome from the Insurance Regulatory and Development Authority (Irda).
Mis-selling has been an issue in the industry. What are the steps needed to tackle it?
Both the regulator and the companies are taking steps to prevent mis-selling and follow need-based selling. Irda's initiatives include mandatory Standard Proposal Form for each individual life from April 1, 2014. This will necessitate companies to analyse customer's need and measure product suitability matrix. Further, Irda has also made benefit illustration compulsory for all products, so that customers are aware of what they are buying.
Insurance companies are also taking steps like welcome calling before issuing the policy, mystery shopping to check selling practices.
Life Insurance Council is planning to have a customer satisfaction survey. How will it help?
Presently, there is no feedback mechanism in the life insurance industry to gauge the customer perception about products and services of the industry. Hence, the council has decided to bring out a survey to get an idea of the customer's satisfaction. We have prepared the Request for Proposals (RFP) for this project and will then short-list consultants for the process. Given the size of the project, we may need more than one consultant.
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This survey will take about 6-8 months and will bring out customer satisfaction scores, which can then be released on a regular basis. This will help insurers fine-tune their products and services as per the customer needs.
Since the life insurers are entering into a new phase from October 1, do you anticipate a fall in new business premiums?
Life Insurance Council has estimated life insurance industry to record a CAGR of 12-15% over the next 5 years. This growth expectation is based on multiple regulatory and industry changes brought over in the past few years as well as the favourable demographics of the country. Favourable Indian demography – insurable population, expected to grow to 75 crore and life expectancy to 74 years by FY 2020, would help achieve spurt in the preference for Life Insurance.
While the new traditional product guidelines will be implemented from October 1, since the products will be more transparent in nature, we believe that there will not be any fall in premium growth. We expect the penetration level of life insurance industry to grow from 3.2% to 5% by year 2020.
But, will the insurers need more time to refile their products?
Life Insurance Council has asked the insurance regulator for an extension in the deadline for implementation of the new traditional product guideline. From October 1, life insurance companies cannot sell products that do not conform to the new product guidelines for traditional products. We received a representation from the life insurers to extend the deadline so that they have adequate products in their portfolio. We expect a positive outcome from the Insurance Regulatory and Development Authority (Irda).
Mis-selling has been an issue in the industry. What are the steps needed to tackle it?
Both the regulator and the companies are taking steps to prevent mis-selling and follow need-based selling. Irda's initiatives include mandatory Standard Proposal Form for each individual life from April 1, 2014. This will necessitate companies to analyse customer's need and measure product suitability matrix. Further, Irda has also made benefit illustration compulsory for all products, so that customers are aware of what they are buying.
Insurance companies are also taking steps like welcome calling before issuing the policy, mystery shopping to check selling practices.