The life insurance industry already boasts of 20 players and the economic slowdown is affecting the sector. But, new entrant DLF Pramerica Life Insurance sees great opportunity in debt protection for life insurance. The insurer’s Chief Executive Officer Kapil Mehta tells Prashant K Sahu that its India business will be built on three key planks — debt protection, high quality sales force and good service to third-party distributors.
What is your work plan, given that there are already a large number of players in the market and a slowdown has set in?
There is huge opportunity out there. Whenever I meet people in metros, nine out of 10 say they have a life insurance policy. But when I ask them if something happens to you, does your family have enough money to take care of the annual income you generate for the next 10 years, all hands go down. So, there is a huge need for debt protection life insurance. There is a lot of work for us to do.
What is your strategy then?
We are thinking of three planks to build the business on. First, we will focus on debt protection on life insurance. Prudential (the US-based foreign partner, which holds 26 per cent stake in the company) has done a lot of work in the money market. We want to focus on that in India. Debt protection is immune to market volatility. It does not matter whether markets are up or down. It is a fundamental need.
Secondly, we want to raise the standard of advice given to customers. We are building a very strong professional sales force. Of every 100 candidates we meet, we select just two. And they are given specialised training. Over time, our high-quality sales force will stand out.
Thirdly, we will partner third-party distributors, corporate agents and brokers, who already have large customer bases. Many are sophisticated and have high expectations in terms of products and technology to support them. We will be able to give them a unique customisation.
Could you tell us more about debt protection products?
There are two to three ways of giving debt protection. For starters, we have introduced a product called family income benefit and family income plan. This is a pure debt protection plan. If you buy a 20-year plan and something happens to the policyholder after six years, the policy gives a monthly income to the household for the remaining 14 years.The early feedback we are getting is very good. We will introduce more products, which are totally protection-oriented. Apart from this, we are looking at a few other smaller segments. For example, we are thinking of DLF home-owners, of developing a product appropriate to them. Many of them take loans and it is perfectly natural to cover those loans with life insurance.
We are also encouraging our advisors and sales force to sell unit-linked products with more sum assured and longer tenure than the market standards.
What is your marketing and distribution strategy?
DLF (the real estate major owns 74 per cent in the insurance company) is a highly-regarded brand in India. Prudential is one of the established insurance companies in the world.
In terms of distribution, we are taking a segmented approach. There is a certain set of customers whom we are approaching through agents and others whom we are approaching through third-party distributors.
How strong is your branch network?
Right now, it’s small. We have two branches in Delhi. We are in the process of opening branches at Ludhiana, Amritsar, Jalandhar and other locations in the next couple of months.
Over the next year or two, we see ourselves as a pan-India player. We will invest about a Rs 1,000 crore over the next five to six years to expand the business.
