On the first anniversary of privatisation of the insurance sector, new players feel that they could have done far better even though their operations are on track.
Ask any new player about the experience in the first year, the refrain is "they are on target".
ICICI Prudential Life Insurance Company managing director Shikha Sharma said: "We are moving towards meeting our targeted 100,000 policies by March 31, 2002."
HDFC Standard Life Insurance Company is confident of achieving the targeted sum assured of Rs 200 crore by the end of the year (December 31). It has already posted a premium income of Rs 12 crore.
The Indian insurance industry opened up exactly one year ago when ICICI Prudential Life sold seven policies to underprivileged children on December 12 last year. On the same day, HDFC Standard Life introduced two basic products -- endowment and money back -- with four riders, and sold three policies on day one.
The industry feels that the full range of regulations ought to have preceded the opening up of the insurance sector. "There have been serious handicaps in terms of sales with the lack of corporate agency and insurance brokerage houses. These are two significant channels which should be opened up for the industry at the earliest," says Andersen partner Ashvin Parekh.
The lack of adequate distribution channels has hampered the reach of the new players, which are looking at becoming national players but have to be satisfied with a presence in just around 10 to 15 cities.
HDFC Standard Life boasts of having the largest presence across 13 cities. Said the company's marketing head Pankaj Seith: "We will cover 17 cities by December end and add another 12 to expand our presence in the country by March 2002."
ICICI Prudential has presence in 10 cities. It will expand its reach to another 10 by the end of the fiscal, said Sharma.
New players have adopted a "top down approach", starting from metro cities and working down to class A towns. "Most of us have just tested the waters. At the same time there has also been a conscious effort to focus on the end consumer," said Raj Raman, senior vice-president, marketing, Tata AIG.
Nevertheless, customers in Bhatinda, Bhopal, Patna and Ranchi among a host of other class II cities are yet to be tapped. The new insurance players are constrained by limited capital and human resources to expand their operations across the country. At the same time, Seith added that the importance of identifying the available infrastructure and economic potential of the towns.
"Corporate agents and bancassurance channels could have helped us expand our distribution reach. But meanwhile, we are looking at allied distribution channels," said Seith.
The new players expect to gain critical mass next year by which time they hope to tap the bancassurance channel. Dabur CGU Life Insurance, which has tied up with Canara Bank, ABN Amro Bank and the Tamil Nadu-based Lakshmi Vilas Bank, expects to sell 50 per cent of its policies through the banassurance channel.
SBI Life Insurance Company will be a major player in the bancassurance segment. Says the company's managing director and chief executive officer, R Krishnamurthy: "This will help in the penetration of insurance products across the country."
