IRDAI has issued license to new companies Acko Life Insurance Ltd. and Credit Access Life Insurance Ltd. With these two additions, the total number of life insurers operating in India have gone up to 25, which had remained stagnant since 2011, when the certificate of registration was last granted to a life insurer. Around 18 applications are pending with IRDAI for grant of license for operating in the insurance sector in India.
Entry of new players will mean more competition and the companies must explore new markets and new segments to expand their business. Insurance Industry is getting tough competition from mutual fund Industry in savings and long term products. Along with tailor-made and customised products, faster claims settlement, timely redressal of grievances, reduction in misselling of policies, the Insurers must reach out to the consumer with platter of offerings which will help to solve their problem and help them in time of need.
The distribution system needs to be made more robust with regular education and training programmes of Insurance Intermediaries. The intermediaries seriously lack organised training programmes. Once the intermediaries get educated they must work for customer education as they are the first point of contact on behalf of the company. Insurance Company must shift focus from force selling to educating both intermediaries and customers as an informed person is likely to make correct decision to safeguard his future. This will also reduce the problem of underinsurance which is widely prevalent in the industry. When people don’t get full benefit of insurance they tend to criticize the insurance industry.
Bancassurance is also an important area where education and training of concerned officials is must. Insurers are getting good chunk of business from bancassurance as consumers are forced to buy insurance when they avail any loan products. It is seen quite often that banks don’t provide full value cover and just insure portion of loan advanced which leads to underinsurance. When the claim will take place insurance company will not indemnify the insured fully and as a result industry will earn a bad name. So the interest of the consumers must be protected so that they take informed decisions.
