Page 17 - Life Insurance Today January-June 2020

levels is four times that of India where they have four times
the agents working on the field selling retail products," said
Padalkar suggesting that there is huge potential for this life
sector to scale further over the years to come given India's
favorable population demographic.

To this the LIC managing director Anand also said that the
if Indian insurers who have around 20 lakh agents working
for them, can add 50 lakh more such agents, it will address
the problem of under penetration while also creating
ample employment opportunity aiding the country's
economy in a more holistic manner. He also added that the
insurance industry in India needs to have further
competition to be able to expand to a greater customer
base. "China has almost the same population as India.
However, they have 100 companies competing in the life the fact of what products will sell and what are the needs
insurance market as against 24 that are operating here. of the customers. The product landscape changed over the
Furthermore, relaxation in regulatory norms can also help last 18 years from pre-dominantly Unit linked business till
Indian insurance sector cover a wider consumer base," the point regulator intervened a few years back to
Anand said. traditional business. This was a big shift from a customer's
point of view.
Provision for easing customer authentication models via
unified KYC, allowing life insurance companies sell health In the pre-liberalization era, products predominantly sold
insurance products, decreasing Tax Deductible at Source in this country were the traditional participating product
(TDS) for non resident Indians on pension plans, easing by LIC of India. The Indian customers had no inkling about
minimum policy tenures to get more millennial to buy the unit-linked product and how it works. During those
protection were some potential regulatory relaxation days, insurance was even less popular than now, so the
discussed by the panel as an option for the regulators to prime reason for purchasing of life insurance were tax
prod into.. saving and long-term savings. People never compared the
returns on the products partly because there were lesser
Current Situation of Indian Life Insurance saving options as businesses mostly relied upon the
relationship between the buyer and agent. Most common
Market: short-term saving tools were fixed deposits in the bank.
The key points bothering current life insurance companies
in the Indian life insurance market are: Post liberalization era brought a sudden surge in the unit-
Y Selection of right products for the right customer; linked business. It was sold across all sections of the society
with providing investment comparison from other
Y Challenging distribution;
investment products. This transition was not smooth and
Y The potential and pitfalls of rural insurance in India; there was a paradigm shift in the product shelf for
Y Challenges in meeting the top line; customers. The customers were presented with unit-linked
products which were serving very different needs as against
Y High lapsation rate;
the traditional participating products sold before the year
Y Hitting the bottom line; 2000 by LIC in the monopoly market. The pitch of the
Y Longer Payback period. product changed from insurance as long-term savings
products to comparing investment return on the different
All the above issues are interrelated and stemming from unit-linked products. During the same time, customer's

The first step is you have to say that you can.

Life Insurance Today January - June 2020 17