Page 7 - Life Insurance Today January 2018

is hesitant and tentative, and the level playing field anything changed for nearly a decade. Almost every
imperative does not prevent a government entity from company was reporting losses because of controlled
getting preferential treatment. The Indian insurance pricing and the way claims were settled. But that may
industry too has contributed to the current intrusive 'rule change for the better. New companies that are coming in
based' regulatory mechanisms. Insurance business has not will have very little to destabilise market dynamics when
been very successful in creating value, delivering returns the industry is at Rs 1.25 lakh crore. Business means
below the cost of capital for years. fulfilling customer's requirements. Companies that have
the greater number of satisfied customers are more
The non-life insurance industry has the highest combined successful. Satisfying the customers with all the queries
ratio across developed and emerging countries, almost for and solving all their issues ensures a healthy growth to any
the last 15 years. What one observes is that 'poor market company. And a growth of unsatisfied customers is the
conduct' leads to even more intrusive regulations - with sure indication of the closure of a business.
the one feeding the other in a circular movement. The
Indian insurance market though feels redeemed with the The 'IRDAI Protection of Policyholders' Interests
top lines and the gross premium increases, the growing Regulations 2017 ensure that "Every insurer shall display
number of policies across life/non-life sectors, and the the service parameters and turnaround times as approved
investment led rather than underwriting-led profits. by the board on its website and keep the same updated
as and when the service parameters are revised by the
Digitisation of the databases of insurance companies, board." With the prevalence of employer-paid health
linking of insurance policies with personal identifiers such insurance, IRDAI now insists that the policy document
as Aadhaar, vehicle registration numbers etc. contribute mention upfront co-payer limits if the policy is co paid by
to the growth. Technology is another tool that companies the employees. Insurers are also now required to update
are betting on to lift their fortunes. Today motor, health on their website the terms and conditions of every
and travel insurance policies are sold online. Policies are insurance product that is withdrawn or modified. And
sold online or through agents, manufacturers and banks. update the list at frequent intervals.
But online sales are merely 3% compared to 30% in the
US and UK. Disruption will come in the industry with The Indian general insurance industry, which generates an
companies focusing on pure online distribution. annual premium of Rs 1.27 lakh crore, is still dominated
by the public sector companies,
but the likes of ICICI Lombard,
Bajaj Allianz General Insurance
and HDFC Ergo have made
strides with advancing market
share. It is ranked 18th among
88 nations. Stars are aligning
for the business to get more
profitable now than in the past
- be it technology or the
changes in regulations,
including the provisions of the
Motor Vehicles Act, and the
improving data availability with
Protection of policyholder's interest: the information bureau helping to eliminate frauds. It all
changed in 2007 when the insurance regulator brought in
In the 17 years since the private sector general insurance
the detariffication policy, except for third party motor
companies were permitted to write policies, hardly insurance where the regulator retains price control.

“Life isn’t about finding yourself. Life is about creating yourself.”

Life Insurance Today January 2018 7

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