Page 29 - The Insurance Times October 2021

women of this country. Although women consist of 48% 35948.72 crores for the private insurers, i.e. 85% of the
of insurable population, only 36% of the policies have total surrenders effected on their policies. Therefore,
been sold to women. Women specific products are very most of the private insurers are not really into the
few in numbers although women have special types of business of marketing savings or protection type
insurance needs. Although 27% of insurance agents are products. While ULIPs are useful products for certain
women (for LIC, this number is only 24%), the insurers sections of the market, life insurance needs to be sold
have not done enough to engage them properly to more like life insurance products. A better product
market products to women. The insurers need to train positioning strategy can do the industry a world of good.
their women agents properly so that more need based The private insurers need to think deeply about the
insurance can be sold to the women customers. product development and marketing strategy.
Y LIC is an overwhelming market leader of the industry. Y Insurers must improve their claim settlement record.
It is characterised by a strong and all pervasive agency People buy life insurance with the hope that the insurers
force bringing more than 95% of business for the insurer. will take care of their families if something happens to
But, LIC needs to professionalise the agency force. With them prematurely. In my opinion, repudiation/rejection
average productivity of 16 policies per annum and Rs. rate should never exceed 1% in case of life insurance.
4.2 lakh first premium, the income of an agent per Only 3 out of 24 private insurers have the ratio less than
annum can not be much. Even if 25% of premium is 1%. Again, no claim should be kept pending beyond
assumed to be the commission (the commission under three months whatever be the need to investigate such
single premium policies being only 2% of the premium), claims thoroughly. If the insurers can not procure
the average per annum income can not be more than sufficient proof to repudiate claims, they have to make
Rs. 1 lakh from new policies. Even if renewal commission the claim payments. Six or twelve months' wait for the
and other incentives are added to it, total commission claimants is surely sending wrong signals to the market.
of an agent is never too much for him (given the low The lives should be carefully selected at the proposal
persistency of policies), to be a true professional. stage so that the claimants don't have to suffer for a
Therefore, an average agent either remains a part time long time to get claim monies. The insurers are within
agent or soon loses interest in the occupation itself. their rights to investigate doubtful cases or high sum
True, the insurer boasts maximum number of MDRT assured cases even after issue of policies (when the life
agents. Now, MDRT agents number about 10,000 which assured is still alive). Some insurers like HDFC Life are
is not even 1% of its agency force and they primarily doing that, too. But, it does not speak well of the
procure business from big cities. According to IRDAI insurers if they spend months or even years in
Annual Report 2018-19, 6,45,745 people joined the investigating claims after the death of the assured.
industry as agents in that year but 5,33,665 did also Insurers have to stop such practices immediately.
leave the industry. The agency profession has to be
made more honourable and fulfilling by giving the Action Speaks louder than Words
agents quality training followed by hand holding in the
Indian economy is poised for higher rates of growth.
initial years. Then only the agents can understand their According to the Bain & Co.'s Research (reference has
role properly and sell right policies and also help already been made in the beginning), the growth and
customers in getting various post sales services.
increasing urbanisation of the country will push 85% of
Y Private insurers have a huge task in positioning products India's population in the category of "Middle Class" in 2030
more appropriately. That they earn more than 44% of under best case scenario. So, Indians will be requiring more
premium income from ULIPs clearly proves that they savings, retirement and income protection products. India
are heavily dependent on ULIPs for their business is already moving towards that direction. This is an
fortune. Top private insurers like SBI Life and ICICI opportunity for life insurers to develop innovative products
Prudential are earning 57.37% and 73.45% of their and market them more vigorously. If insurers fail to meet
premium incomes from ULIPs alone. Now, it is in the increasing life insurance needs of the people, other
everybody's knowledge that these products are for financial products will have a field day at the expense of
wealth generation only as the lion's share of the insurers.
premiums go into equity/debt markets for fetching high
returns. These policies are used more like Mutual Fund We have already mentioned about Max Life Kantar-IMRB
products. In 2018-19, ULIP surrenders were for Rs. research report, which has been prepared on the basis of

The Insurance Times, October 2021 29