Page 19 - Life Insurance Today January-June 2020

The beauty of insurance is that it provides discipline of The way to service customer is to segment the market and
paying a regular premium for both savings and protection offer the correct product at the correct price to that
against life for the long term in one package, which should specific market segment. There is a huge untapped
be the attractive point as against managing the different potential in India, which needs to be targeted. The
portfolio for mutual fund and term product where the distribution channel is a medium to reach the masses in
majority of the population has a problem in handling. urban, semi-urban and rural areas. So, the insurance
Insurance is a simple one-stop shop with the discipline of company should focus on pricing, distribution, risk
regular premium payment providing long-term protection. management and investment decision-making.

The meeting of right product and true customer's need Measures to counteract the challenges of Life
would make the life insurance a pull product as against Insurance Business in India are:
today's being a push product. A pull product will have 1. Insurance companies in India will have to develop
higher persistency which will help insurance companies in
suitable channels to tap this huge market as the core
meeting its margin better. It will also help them recover
of insurance business hinges on a proficient distribution.
expenses allocated to the product which will have a positive
impact on the managing payback period on the anticipated 2. Direct marketing is one of the most successful channels
line. of distribution in the developed economics. It is a great
way to reach a large population. So the product should

Challenges for Insurance Business in be sold through telemarketing or direct mail as found
appropriate in the corona affected lockdown period.
India:
3. In the insurance business, cost control and ability to
The transition of the insurance industry from a public serve a large number of customers are critical issues.
monopoly to a competitive environment now presents very So, modern technology is to be adopted to handle both
interesting challenges, both to the newly introduced the services effectively.
players and to the customers. The benchmark of success
of organization is not only determined by the rate of return 4. Today, customers are well-equipped with information,
so insurance companies should reposition their various
but also by the quality of corporate governance, so good
products by changing customer attitudes.
corporate governance practices should be followed by the
life insurers. Though LIC has done commendable work, 5. To bring new innovative products by the Insurers - like
there is still a great deal of scope for bringing in innovative ICICI Prudential has brought recently IPS Money Back
products and distribution channels to tap insurance market. ALPHA (combining the concepts of term, money back,
accident benefit and critical illness covers within in a
Currently the product-market relationship is dominated by single product) and LAKSHYA Lifelong Income (which
personalized selling rendered by tied agents. So the agents may be termed as Product covering for Three
should be able to understand the complexity to assess the Generation) - as such both being very interesting
requirement of the populace and then only advice on the proposition for alluring the customers.
appropriate policy, which suits, to the needs of the people.
6. The actuary should be required to attend seminars
Also, companies will have to transform customer
called continuous professional development courses for
relationship management to the value-based client
the efficient financial control of the organization.
relationship. The CRM challenge have the pyramid of three
sub-challenges i.e. product development, pricing With the tremendous impact on mortality rate after the
mechanism, and technology management. Insurance Corona virus (Covit-19) attack in India where all Indian
business is based on averages and spreading of risks. So, a insurers have to increase the premium rate for the security
flexible pricing structure for sustaining customer confidence aspects of life risk coverage. Practically with the huge death
and interest will be a challenging task before Indian cases occurred due to this man-made catastrophe, all
insurers. Indian life insurers immediately & immensely increased the

It always seems impossible until it's done.

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