In an interview Yateesh Srivastava, Chief Marketing Officer & Head – Talent, AEGON Religare Life Insurance discusses his outlook for the insurance industry and measures that the government can take to bring the industry back on track.
Where do you think is the Indian insurance market headed, particularly in view of the current slowdown?
For the last couple of years the life insurance market in India is facing a number of challenges involving the macro-economic environment, consumer sentiment and rapid regulatory change. This has led to a downturn in volumes. However, I believe that the major impact of all these changes is behind us and the life insurance industry is headed back into positive territory hereon.
What do you expect the year 2013 to be like for the insurance industry?
2013 is likely to be a year of transition and will be determined by the views and strategies of individual companies. Our focus will be on innovation, simplicity and transparency.
What are the challenges the insurance industry, particularly life insurance industry, is facing currently?
As I said earlier, the macro-economic environment continues to be challenging and this has a resultant impact on consumer sentiment. This has been further augmented by a trust deficit between the industry and the consumer. However, the need for protection, health-care, long-term savings and retirement continue to exist and in fact are even more critical today. The key issue will be how the industry builds a positive customer franchise.
What, according to you, are the major steps that the regulator as well as the government need to take to bring the industry back on track?
More than the regulator and the government the industry needs to introspect and find solutions to customer problems and needs. We must look at providing simple and easy solutions that tackle genuine customer needs as opposed to pushing products. The industry has to focus on building a sustainable long-term customer franchise based on simplicity and transparency.
From a government perspective, increase in FDI to 49% to enable inflow of capital and an ‘insurance friendly’ tax regime would be most welcome.
Even as they adapt to significant regulatory changes, insurers in India will need to evaluate their product suite and distribution strategy. Do you agree?
Absolutely! The world is evolving at a very rapid pace. Technology is going to, in the very near future, drive or actually force us into greater transparency, as customers evolve and become more knowledgeable. The insurance industry cannot look at old solutions to fit new needs. Simple transparent products and evolved technology-led distribution will be the key to success in the future.
Finance Minister P Chidambaram has recently asked the insurance companies to refrain from mis-selling and devise simple products for people to boost growth in the sector. Do you think mis-selling is one the biggest problems that’s hurting the life insurance industry in India?
Quite honestly, one cannot shy away from the bogey of mis-selling which has dogged the life insurance business for a very long time. Life insurance as an industry and all its constituent companies have to be firm and resolute that they will tackle the menace of mis-selling directly and not look the other way. Sales personnel found indulging in mis-selling should be terminated by the company and the industry must maintain a common database of such people so they cannot carry on with their malpractices elsewhere.
