Life insurance needs to compete with gold and real estate
Chris Cruse and Associates Real Estate - Thanks to some progressive initiatives by the Insurance Regulatory and Development Authority (IRDA), the life insurance industry has undergone a major metamorphosis.. In this interview with The Hindu, Managing Director and Chief Executive Officer of ICICI Prudential Life Insurance Company Limited Sandeep Bakhshi discusses the road ahead for this evolving industry. Excerpts:
The life insurance business has started showing positive signs. What has caused this upturn?
The efforts initiated by the IRDA and the industry over the last few years in terms of better products, a much higher level of protection, and far better returns for customers have started showing results. A lot of investment was done in products, process, technology, and distribution. The efforts over the last three years have brought about a positive sentiment.
A journey of three-and-half years of thought process, distribution and awareness-building by companies and regulator has led to an improvement in the overall business.
How is the industry evolving in India?
Right now, there is constant evolution and convergence in the financial services. Broadly, there are four components of life insurance license. One is the safe savings reimbursement. In the savings and investment space, it competes with fixed deposits, mutual funds, government bonds, and other offerings from public sector undertakings (PSUs). Then you have health and health and life insurance, which compete with standalone health companies and general insurance.
Besides, pension products have competition from national pension schemes and the pension mutual funds. Interestingly, the life insurance companies are the only category in the financial system which offers annuities. The idea is to make life insurance competitive against other investment and saving opportunities such as gold and real estate.
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