Page 18 - The Insurance Times September 2024

Life insurers pushing sales business, said MD & CEO Siddhartha actively seeking coverage. This
Mohanty. presents an opportunity for agents to
before start of new regime
During the announcement of the engage with potential customers.
Life insurers, who are seeking a three- company's financial results for the first Therefore, the availability of health
month extension from the insurance insurance is expected to benefit the
quarter, Mohanty said that the
regulator to comply with new company is looking at an acquisition life insurance business as well.
surrender value norms, are
during the current financial year.
aggressively pushing products to lock in "Rather than set up a vertical for Govt mulls diluting up to
customers ahead of the October 1 insurance, we felt that we can acquire
deadline for the start of the new 5% stake in LIC in FY25
a company which will allow us to start
regime. selling health insurance across the The government may consider diluting
The new norms are expected to put country," said Mohanty. up to 5 per cent stake in the Life
pressure on margins and alter Insurance Corporation of India (LIC)
LIC has over 14.1 lakh agents, which is this fiscal as part of incremental steps
commission structures, driving among the largest agency force among
companies like HDFC Life and Max Life insurance companies worldwide. to meet the minimum public
to push sales that are growing 40-50% According to sources, most of the shareholding (MPS) norm.
in July ahead of the deadline. corporation's agents are already The Centre had mopped up Rs. 21,000
Insurers say the yields on non- distributing health insurance for other crore in May 2022 via an initial public
participating products are likely to fall private companies as regulations offer of India's largest life insurer.
by around 25 basis points under the permit an agent to work for life and LIC's IPO, the biggest so far in the
new rules, which mandate insurers to non-life companies. These agents are history of the Indian capital markets,
offer guaranteed surrender value from expected to switch to selling LIC comprised entirely of an offer-for-sale
the first year on non-participating products. by the government (of 221,374,920
products. One basis point is a Industry sources said that health equity shares of Rs. 10 each) at Rs.
hundredth of a percentage point. insurance is increasingly becoming a 949 apiece, accounting for 3.5 per cent

"The surge in sales for some bank-led 'pull' product, with many young buyers of its paid-up capital.
insurers is due to aggressive marketing
of old insurance products that are set CSFE, Edelweiss Life in bancassurance tie-up
to be discontinued in September," said Capital Small Finance Bank Limited (CSFB) and Edelweiss Life Insurance have
an insurance executive. "There is an entered into a bancassurance tie-up. This strategic partnership will enable
expectation that new products
CSFB's customer base to access Edelweiss Life Insurance's life insurance
launching in October might be more products suite, thereby meeting their need for financial security.
appealing to customers, even though
they might offer lower yields due to The arrangement aims to enhance CSFB's life insurance offerings by
potential adjustments in yield rates providing its customers with access to Edelweiss Life's digital platform and
and commission structures." service touchpoints. CSFB has 177 branches and with this tieup, all products
of Edelweiss Life will be available to the bank's customers at these branches.
There is some expectation that the
yield on new products could decrease Sarvjit Singh Samra, MD & CEO, CSFB said, "We are thrilled to announce
by 20-25 basis points, and there might our strategic partnership with Edelweiss Life Insurance.
be changes in commission structures, "As we expand our financial solutions, this tie-up with Edelweiss Life enhances
including possibly linking commissions our ability to offer comprehensive and tailored life insurance products to
to persistency or spreading payments our customers, reinforcing our position as a trusted financial partner."
over time rather than upfront. By improving accessibility to quality insurance solutions, CSFB aims to
become the primary banker for our middle-income group customers,
LIC looks to acquire health creating a more secure and prosperous future for them, he said.
insurance co Sumit Rai, MD & CEO, Edelweiss Life Insurance said, "We are excited to
LIC plans to take the acquisition route embark on this journey with Capital Small Finance Bank and will together
to get into the health insurance protect people's dreams and aspirations."

The Insurance Times September 2024 17