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World's biggest life insurance industry

Worlds biggest life insurance industry
The 24-member Indian life insurance industry, the biggest retail financial service providers in India with around 36 crore in-force policies, the largest in the world and strikingly conscious of an expanding rural footprint (more than 72 per cent branches in rural and semi-urban geography) for inclusive growth, is now embarking nationally and spearheading the next big step to make ‘Customer Centricity’ a key focus area.

The life insurance industry, riding on the growth path that has been spurred by product innovation and multiple distribution channels, is now making a concerted effort towards being customer centric in its approach by adopting six internationally accepted principles:-
Increasing overall confidence: Embed TCF (Treat Customers Fairly) in corporate culture
Meeting customer needs: Products and services marketed and sold are designed to meet the needs of customers
Clear information: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale
Suitable Advice: Create awareness and inculcate behaviour in distribution for promoting need-based selling
Product performance: Review of performance of funds
Post-sales barriers: Continued focus on improving complaint management process.
To implement the above customer centricity initiatives, Life Insurance Council, the industry body of life insurers in India, plans to carry out a nationwide campaign. As a part of the campaign, Life Insurance Council is contemplating to request members to provide training to its employees and use the ‘Treat Customers Fairly’ measures to motivate them to do effective customer service at all levels.

The ‘Treat Customers Fairly’ programme would be successful only if appropriate education is imparted to customers too, so that they could become responsible counter-parties. Accordingly, it plans to organise customer meets as also training for intermediaries, across the country to create synergies and build better understanding of the life insurance segment.

Life Insurance Council secretary general V Manickam said, ‘The life insurance industry would reinforce customer centricity at every step, be it creating awareness by improving financial literacy, need-based service and addressing effectively customer grievances etc. As a matter of fact, there has been an improvement in death claims settled by life insurers in terms of number of policies as also by amount in the past three most challenging years. There has been improvement in the time taken to settle death claims and the number of claims repudiated too has seen a significant drop.’

‘Currently, the country’s life insurance penetration is 3.2 per cent (2012-13) and life insurance density is 43$ (2012-13). By implementing the customer centricity initiatives, Life Insurance Council is confident that these would help in increasing life insurance penetration to 5 per cent and density to 100$ around 2020,’ added Manickam.

Customer grievance redressal through the Integrated Grievance Management System (IGMS) has been successful, with the number of grievances attended rising and the number of pending grievances steadily declining to below 1 per cent.

The four-pronged regulatory changes in recent years have brought renewed focus on customer centricity — be it protection-oriented like making sum assured at a minimum 10 multiples and offering guaranteed surrender value, or transparency-oriented like forming a policy-holder protection committee or making benefit illustration mandatory for all products, or even investment-oriented relaxing investment guidelines for exposure to infrastructure, or need-oriented like measuring product suitability matrix before making any recommendation.

The Indian life insurance industry also witnessed spectacular growth in AUMs, with investments that have been targeted towards deployment of funds enabling infrastructure growth in the country. The AUMs of life insurers have risen to Rs 17,41,175 crore as on March 2013 as compared to Rs 1,94,010 crore in 2000-01, with a phenomenal growth of around 900 per cent.
For the 11th Five Year Plan, the life insurance sector provided more than Rs 7,25,000 crore as long-term funds for infrastructure development of the country.

While the Indian life insurance industry, which has immense growth potential compared to other countries, has witnessed stable growth in total revenues over the last two years, one of the most challenging period, there’s been a healthy increase in renewal prema to Rs 1,79,831 crore as on March 2013, compared to Rs 1,65,240 crore on March 2011.

The in-force policies too have increased to 35.87 crore as on March 2013 compared to 32.54 crore two years ago and registered rapid growth of 350 per cent compared to 1999-2000, when the sector was opened up for private sector participation.

This signifies that an increasing number of customers have reposed trust and confidence in the life insurance industry.
The total benefits paid to customers by the Indian life insurance industry in the most challenging period has increased to Rs 1,91,336 crore as 31 March, 2013, compared to Rs 1,41, 806 crore as on 31 March, 2011.
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