Insurance Institute of India conducted a National Conference, Back to the Basics of Insurance on 27th January 2012 at Grand Hyatt, Santacruz, Mumbai. Read the Full report….
The theme of the Conference inaugurated by Mr J.Hari Narayan, Chairman, IRDA, was on the insurance industrys need to examine whether it has lost touch with the basics in its fast pace of growth over a decade of liberalization. Insurance Institute of India, through this conference has pointed out to the industry the necessity to review its position against the fundamentals of insurance like mutuality, financial security, utmost good-faith, financial soundness, customer relationships and above all, trust.
The theme is of added significance as the insurance industry has attracted a lot of professionals across different sectors as well as a lot of young talent in the recent past.
Mr D.K. Mehrotra, President, Insurance Institute of India and Chairman, Life Insurance Corporation of India, in his welcome address pointed out that such academic seminars provide neutral forums to the industry where issues can be discussed dispassionately. He emphasized the role of academic seminars in fostering professionalism and increasing the academic appetite of insurance personnel.
In his inaugural address, Mr Hari Narayan emphasized that the industry should reach out to the people in multiple ways to build a closer relationship with the customer and to build trust in the insurer and in the very concept of insurance. He pointed out that the very fact that the bulk of the industry’s premium was coming only from nine states endorses the necessity to reach out. Products have to be developed focusing on the market and the changing needs of the customer and not on the profitability angle.
Underscoring the point of reaching out, he stated that considering the large number of motor accidents on highways, and the importance of getting medical attention during the golden hour in saving lives, insurers can possibly consider systems of providing free ambulance services on national highways synergizing with NGOs, humanitarian organizations and hospitals. Mr Hari Narayan emphasized the importance of the financial health of insurers and pointed out that this was a matter of concern for the international insurance community as well, as reflected in the Solvency II regime.
The first of the three thematic sessions, Life Insurance – a Relook at Mutuality, was headed by Mr. G. N. Bajpai, Chairman of Future Generali Insurance Co. and former Chairman of SEBI and LIC of India. Panelists included Mr Kamalji Sahay MD & CEO, Star Union Dai-chi Life Insurance Co. Ltd., Mr M. Suresh, MD & CEO, Tata-AIG Life Insurance Co. Ltd., Mr Deepak Sood, MD & CEO, Future Generali Life Insurance Co. Ltd., Mr Sandeep Ghosh, MD & CEO, Bharti Axa Life Insurance Co. Ltd. and Mr S.Roy Chowdhury, ED, LIC of India.
The panel stressed on the need for insurers to look inward as to whether they are doing the right market practices and to ensure that the social importance of insurance as a benign mechanism is not vitiated in the name of competition. Panelists pointed out frequent regulatory changes necessitating insurers to switch gears at short notice were not desirable.
A view was expressed that insurers should build on their core strengths in the area of insurance and pension products than on unit based products and mutual funds. Panelists pointed out that the need for life insurance and pensions is more pronounced today with the weakening of the undivided family system, which was a form of insurance in itself, and the growth of the nuclear families.
General Insurance: Pricing, Profits and Development – a Relook, the second thematic session, was headed by Mr H. Ansari, former IRDA Member (Non-Life), Chair Professor of NIA, Pune and Additional Director, CIS, National Law University, Jodhpur. Panel Members were Mr. Arun Agarwal, Consultant, Lloyds, Mr Shrirang Samant, Country Head, Travelers Companies Inc., Mr. Sadasiv Mishra, General Manager, The New India Assurance Company Limited and Mrs T.L. Alamelu, DGM, United India Insurance Co. Ltd.
Discussions were around the need for underwriting discipline, charging of technically sound rates, product innovation and reaching out to the masses to provide responsible covers aimed at providing social security. The emphasis was on developing sound insurance practices that would improve the trust factor in insurance and attract more and more people towards insurance.
The thematic session on Distribution: Expanding Reach and Building Trust was headed by Mr N.N. Joshi, Director, ING Vysya Life Insurance Co. Ltd. The Panel comprised Mr Malay Ghosh, CEO, Reliance Life Insurance Co. Ltd., Mr Hemant Bhargava, ED, LIC of India Ltd., Mr. Rajesh Ajgaonkar, VP, IDBI Federal Life Insurance Co. Ltd. and Mr Prerak Parmar, Zonal VP, Max New York Life Insurance Co. Ltd.
Discussions were essentially of ethical marketing practices and building relationships and trust that would be a win-win position for both insurers and insured over a period of time. Issues like mis-selling and choosing the appropriate channel for the product sold were discussed. It was pointed out that life insurance should be sold as a protection plan and not as a financial product. The importance of the distribution channel as a service provider of quality was emphasized by the panel who felt that the weakest link in the chain would weaken the companies efforts.
Mr Sharad Shrivastva, Secretary-General, Insurance Institute of India stated that more of such academic seminars were in the offing. He added that such seminars could bring out the industry’s uncolored views on matters from academic and professional perspectives and would be of value to the industry, the regulator and the government in framing policies for the future.
