 "Planning an awareness campaign to ensure products are well understood: 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, 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. Edited Excerpts:
Could you throw some light on the customer satisfaction survey and how it will be helpful to the insurance companies?
Life Council has taken up the initiative to conduct customer expectation survey in order to understand the expectations of the customers towards life insurance products in comparison with other financial services products and the satisfaction level of the customers.
With numerous issues faced by the industry like lack of insurance knowledge, increasing surrenders, mis-selling among others, the expectation from this survey is to understand the expectations from Life insurance products v/s other financial services products. It will also help us know the satisfaction levels of the customers who buy Life Insurance.
At what stage is the survey? Have the market research agencies been finalised for this project?
Life Council is in process of finalizing the Request for Proposal (RFP) which would be sent to the identified agencies who in turn would make a detailed presentation. Finally a suitable agency would be selected by life council to conduct the customer expectation survey.
New product guidelines will now be implemented from January 1, 2014. Do you see any further need for postponing the deadline?
Currently, we may not foresee any need for postponing the deadline for implementing the new product guidelines. But if there is any reasonable demand from the industry, we may take it up with the regulator.
Life insurers have now been asked to provide HIV/AIDS cover. However, since we do not have any data about People Living with HIV/AIDS, would the council seek any modifications to the circular?
Life Council had constituted a Committee to prepare ‘Standard Guidelines with respect to underwriting, claims, for people living with HIV’. These guidelines were submitted to IRDA, who in turn added some other criteria and sought industry feedback. Life Council is now in the process of seeking views of its Members and subsequently would decide on the need to modify the circular.
Agent attrition has been an on-going issue in the life insurance industry. With a decrease in the pass percentage required to become an agent, do you feel that the issue has been resolved? Is the council taking any additional steps to tackle the issue?
The Issue of Agent Attrition is addressed positively by the historical decision of IRDA in reducing the pass percentage to 35%from earlier 50%. We understand from companies that there has been substantial improvement after the notification of IRDA in May 2013 in the pass percentage of Agents. The percentage of Agent Attrition will slowly decline and over a period of time the number of agents and their productivity would only increase.
Data has shown that customers tend to buy policies with shorter tenure. Is it a cause of concern for life insurers and will the council undertake any awareness campaigns for this?
Buying behavior of customers is changing not only in Life Insurance but across all Financial Services asset classes in India. It is indeed a cause of concern for Life Insurance Council.
However, Life Insurance Council keeps on reinforcing the merits of longer tenure of life insurance products and all Life insurers are always advocating the same. We will be reinforcing the importance of long term aspect in our Life Insurance Awareness Campaign.
New business premiums of life insurers are seeing a fall. With the new product guidelines coming in from January, do you see a reversal in trend?
The trend which was observed with regard to the decrease in the new business premium in recent years is changing. Life Insurers have reported positive growth in new business premiums and this trend would continue post arrival of new products from January 2014, and very soon the life insurance industry would be in a take-off situation.
While insurers are taking internal steps to stop mis-selling, the problem exists. Does the council feel that sharing of fraud data among insurers could be a solution?
Life Council is of the opinion that Sharing of Fraud data is not a solution to stop mis-selling. In fact, we are initiating Life Insurance Awareness Campaign that is expected to create awareness and help customers understand the life insurance products thoroughly and help reduce mis-selling to a great extent in future.
In an interview with M Saraswathy, V Manickam, Secretary General, Life Insurance Council talks about this initiative and other strategies for growth. Edited Excerpts:
Could you throw some light on the customer satisfaction survey and how it will be helpful to the insurance companies?
Life Council has taken up the initiative to conduct customer expectation survey in order to understand the expectations of the customers towards life insurance products in comparison with other financial services products and the satisfaction level of the customers.
With numerous issues faced by the industry like lack of insurance knowledge, increasing surrenders, mis-selling among others, the expectation from this survey is to understand the expectations from Life insurance products v/s other financial services products. It will also help us know the satisfaction levels of the customers who buy Life Insurance.
At what stage is the survey? Have the market research agencies been finalised for this project?
Life Council is in process of finalizing the Request for Proposal (RFP) which would be sent to the identified agencies who in turn would make a detailed presentation. Finally a suitable agency would be selected by life council to conduct the customer expectation survey.
New product guidelines will now be implemented from January 1, 2014. Do you see any further need for postponing the deadline?
Currently, we may not foresee any need for postponing the deadline for implementing the new product guidelines. But if there is any reasonable demand from the industry, we may take it up with the regulator.
Life insurers have now been asked to provide HIV/AIDS cover. However, since we do not have any data about People Living with HIV/AIDS, would the council seek any modifications to the circular?
Life Council had constituted a Committee to prepare ‘Standard Guidelines with respect to underwriting, claims, for people living with HIV’. These guidelines were submitted to IRDA, who in turn added some other criteria and sought industry feedback. Life Council is now in the process of seeking views of its Members and subsequently would decide on the need to modify the circular.
Agent attrition has been an on-going issue in the life insurance industry. With a decrease in the pass percentage required to become an agent, do you feel that the issue has been resolved? Is the council taking any additional steps to tackle the issue?
The Issue of Agent Attrition is addressed positively by the historical decision of IRDA in reducing the pass percentage to 35%from earlier 50%. We understand from companies that there has been substantial improvement after the notification of IRDA in May 2013 in the pass percentage of Agents. The percentage of Agent Attrition will slowly decline and over a period of time the number of agents and their productivity would only increase.
Data has shown that customers tend to buy policies with shorter tenure. Is it a cause of concern for life insurers and will the council undertake any awareness campaigns for this?
Buying behavior of customers is changing not only in Life Insurance but across all Financial Services asset classes in India. It is indeed a cause of concern for Life Insurance Council.
However, Life Insurance Council keeps on reinforcing the merits of longer tenure of life insurance products and all Life insurers are always advocating the same. We will be reinforcing the importance of long term aspect in our Life Insurance Awareness Campaign.
New business premiums of life insurers are seeing a fall. With the new product guidelines coming in from January, do you see a reversal in trend?
The trend which was observed with regard to the decrease in the new business premium in recent years is changing. Life Insurers have reported positive growth in new business premiums and this trend would continue post arrival of new products from January 2014, and very soon the life insurance industry would be in a take-off situation.
While insurers are taking internal steps to stop mis-selling, the problem exists. Does the council feel that sharing of fraud data among insurers could be a solution?
Life Council is of the opinion that Sharing of Fraud data is not a solution to stop mis-selling. In fact, we are initiating Life Insurance Awareness Campaign that is expected to create awareness and help customers understand the life insurance products thoroughly and help reduce mis-selling to a great extent in future.