In a deviation from its earlier strategy, ICICI Prudential Life Insurance Company is marketing its retirement solutions plan -- ICICI Pru Forever Life -- on the back of the tax advantages offered by the instrument.
Billboards in the metros are screaming: If you've exhausted your section 88 tax benefit, look at ICICI Pru retirement solutions.
When the new insurance players entered the industry last year, all professed that unlike the state run LIC they would not push products using the tax benefit route.
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Says ICICI Prudential's chief marketing officer Saugato Gupta: "The best way for people to save for post-retirement is to talk of the tax benefit".
The tax element is being used to create a market for pension plans where one does not exist, he said.
ICICI Prudential retirement solution plan contributes significantly towards the company's non-traditional business. The total business exceeded Rs 1,000 crore in terms of sum assured in the 14-month period ended February 15, 2002.
Non-traditional risk plans such as pension and unit-linked products have contributed 35 per cent of the Rs 130 crore mopped up in insurance premia so far.
"This proves that we have been able to change the market dynamics as people are moving from the traditional covers to more non-traditional plans," said Gupta.
ICICI Prudential has recently introduced a product -- Smart Kid --targeted at children, wherein the child's future is secure in terms of his critical educational milestones. This is unlike some of the other children plans, as it ensures the future even on the death of the parent.
According to available data, ICICI Prudential has about 50 per cent of the value share (in terms of premium income) amongst the private players. It is confident of meeting the 100,000 policy target by the end of the fiscal.
"We have sold around 70,000 policies, and have mopped up over Rs 130 crore in premium since commencing business in December 2000," said Gupta.
New players have played a significant role in reshaping the insurance sector -- be it in terms of products, category, and technology, said Gupta. "Insurance today is looked upon as part of the financial planning tool. It is seen as an instrument providing constant investment returns as opposed to the volatility experienced in other financial instruments," he stated.
The reduction in interest rates has played a positive role in the sale of insurance products, he added.