But, say experts, you may look forward to new asset classes, product innovation and better customer service.
The year 2011 was one of the worst in recent times for consumers. The Bombay Stock Exchange's (BSE) Sensitive Index or Sensex fell a little over 23 per cent. While stock market investors lost $6.04 trillion globally, the market capitalisation of BSE-listed companies slid Rs 19.1 lakh crore. This kept retail investors away from stocks and mutual funds; debt instruments brought some cheer on the back of high interest rates. Assured returns and capital safety swayed investors towards fixed deposits, debt funds, etc.
Insurance companies also saw the industry dynamics change. Investors stayed away from unit-linked plans due to bad markets. So, traditional plans came back into the limelight. Good news: The much-awaited Mediclaim portability got approved. However, it has yet to take off.
Borrowers had a tough time, with rising home loan rates, up 2-2.5 per cent since January. Deposit rates also moved up. Most banks are offering over nine per cent; some give over 10 per cent for deposits of one to two years.
Here's what some experts say you could expect in 2012:
“Customers' interest was taken care of by deregulating the rate of interest on savings bank accounts. Implementation of some recommendations of the Damodaran committee on customer service added new dimensions. The industry has, therefore, been focusing on improving operational efficiency and cutting turnaround time in delivering services. Later in 2012, we may see rates going down if the central bank lowers benchmark rates. Quality of customer service will improve as banks will try to optimise costs, thereby bringing down transactional costs for customers.“
MD MALLYA
CMD, Bank of Baroda
“2011 saw implementation of the long-awaited portability for health insurance cover. Customers can change their insurer while retaining their no-claim bonus and enjoying the same coverage period without worrying about the time limit on pre-existing diseases. In 2012, insurance firms are likely to bring more health products and better services.“
KG KRISHNAMOORTHY RAO
MD & CEO, Future Generali General Insurance
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“The year 2011 has been more difficult to chart a course as against 2008. Then, the market was only falling. This year was very range-bound and coupled with issues - euro zone, inflation, rupee depreciation and policy inaction. Valuation-wise, Indian markets are trading at 13 times the one-year forward premium (20 per cent discount to the 10-year average) but there are a lot of headwinds. The first quarter next year is critical; hopefully, a clearer picture would emerge from Europe. The China property market is a big worry, as prices have recently fallen as much as 40-50 per cent.”
ANDREW HOLLAND
CEO, Ambit Investment Advisory
“The favour for fixed income saw traditional life insurance plans gaining prominence this year. It has become important to shift to longer-term savings and protection products. Consumers can expect more balanced products. As the product changes, disclosure requirements will ensure a higher seller and customer engagement at the time of sale. Some select customer segments will increase the usage of the online platform to buy term plans. Customer service will become increasingly important to retain clients.”
PRASHANT TRIPATHY
Director, Strategic Planning & Business Development, Max New York Life
“Residential prices that appreciated 10-30 per cent in 2010 across major cities declined by up to 10 per cent in 2011, crippling the pace of project launches. Thus, 2011 was a dull year (for realty). The deadlock between home buyers and developers should break in favour of buyers in 2012. As this happens, pent demand from the section of buyers sitting on the fence in anticipation of price correction would translate into improved fortunes.”
PRANAB DATTA
VC & MD, Knight Frank India
“2011 saw even first-time mutual fund investors take to paper gold. Fixed income will continue to find favour in 2012. Asset allocation will see more prominence as investors understand diversification and protection from risk. We will also see the emergence of new asset classes and themes such as infrastructure and more commodity-based funds as portfolio diversifiers. Retirement funds and target date funds could also be popular themes.”
SUNDEEP SIKKA
CEO, Reliance Capital Asset Management
