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Insurance companies are revisiting product distribution strategies on combination (termed ‘combi’) products, such as life and health products packaged together, and ‘mallassurance’, the term in the sector for insurance policy sales through malls.
The Insurance Regulatory and Development Authority insurance regulator has said a combi product would be a combination of a pure term life insurance cover, offered by life insurance companies, with a health insurance cover offered by non-life insurance companies or standalone health insurance companies. A life and non-life company would tie-up with each other to sell the product. They’d allowed this to push the very low pentration of insurance products in the country.
Companies have begun doing this but say the sales have been below expectation. Manoj Jain, chief executive officer of Shriram Life Insurance, recently told Business Standard their combi product with a standalone health insurer hadn’t been doing well. “While people buy the product, they either do not renew it or if they do, they only renew the health insurance part,” he said.
Others who were planning to launch such a product are having a rethink. The chief executive of a large public general insurer, who was exploring tie-ups with life insurers to offer a life-plus-health insurance, said the market was still not ready for the product. “We came to understand from customers that they are not comfortable buying this product, since they find it a little complex. Hence, we will only launch a product after taking customer feedback. The policy not only needs to be simple but also an attractive packaged cover for the customer,” said the official.
Another segment where insurers are working on is sale through shopping areas. Mallassurance was an innovative strategy adopted by Future Generali India Insurance for both life and general insurance products. However, company officials said large-size policies were not getting sold through the platform.
Says K G Krishnamoorthy Rao, managing director of Future Generali: “Mallassurance is still in its initial stages. We have been able to sell only small-ticket policies; for larger ones, a customer needs to spend a longer time to understand the policy.”
He said they expected to improve distribution through this model in the near future, when there was better awareness of this structure.
Insurance penetration in India had risen consistently till 2009 but then slipped for the next two hyears. It was 4.1 in 2011 (measured as a percentage of gross insurance premiums to gross domestic product).
