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Private life insurance player, Aegon Religare Life Insurance (Aegon Religare) is planning to expand its product portfolio by launching a series of riders.
The advantage is that these can be attached to any of the already existing plans - both traditional or savings-linked. While initially the company may offer some of these only online, subsequently they will be offered along with offline policies as well, said Amit Kumar Roy, Chief Distribution Officer.
Some of the riders the company is looking to launch will offer cover for loss of income, joint life, critical illness, protection of income along with waiver of income and guaranteed income, etc. In addition to these riders, the company is also looking to launch a pension product this year.
"The riders are all focused on protection,'' Roy said.
There is a lot of appetite for rider uptake in the digital channels. The rider attachment ratio in the online channel is 1.31 times more than in case of offline channels. The best-selling rider is the waiver of premium on critical illness rider, which waives off your future premia in case of a diagnosis of critical illness. This is followed by accidental death benefit rider, which offers additional sum assured in case of accidental death, he added.
In order to improve customer retention and increase persistency ratio to over 65%, Aegon Religare is looking to focus on the direct sales channel and on digitalisation.
As on March 31, 2015, the share of the direct channel, called Aegon Religare Connect, was the lowest in the total distribution mix, at a little over 8%. But in terms of persistency, it was second highest at over 80%, after e-sales or online channel.
"The experience for customers is better in case of direct sales than in case of telemarketing or broking because the knowledge of salespersons is higher in direct sales. Also, our salespersons advice customers on other personal finance matters as well and not just on the product,'' said Roy.
Even though markets are doing well, sales of Unit Linked Plans (Ulips) has not picked up, because customers are still skeptical after having seen huge losses in their Ulips. Also, due to low commissions, there is no focus on selling Ulips among the distribution channels. In fact, surrenders in Ulips are on the rise due to the rising equity markets, Roy pointed out.
