"The insurance industry should grow at more than 15% over the next 5 years"
Good market growth expectation due to favorable changes in demographic profile and increase in per capita income levels in India
Abhijit Gulanikar, Chief Officer - Business Strategy, SBI Life Insurance, talks to Teena Jain Kaushal in an e-mail interview, about the key challenges & opportunities; digital growth and expectations for the next 5 years, in the insurance sector.
1. What are the key challenges and opportunities in the insurance sector?
The Indian life insurance space will witness many opportunities in the coming times. Two major reasons being -
a) Good market growth expectation due to favorable changes in demographic profile and increase in per capita income levels in India b) Possibilities of dramatic changes in delivery mechanism of our service due to proliferation of AADHAR, mobile, UPI and other similar developments
2. Currently, every insurance company seems keen on growing their online process? How do you plan to grow digitally?
SBI Life looks at the online platform first as a means of digital influence and later for acquiring customers. In this regard, we are planning to completely revamp our website to meet both the goals. We are working to optimize our online customer acquisition processes by clever targeting and messaging.
3. What are your growth expectations for the next 5 years?
The industry should grow at more than 15% over the next 5 years. Last few years we have grown faster than the industry and we are working towards continuing to do so.
4. Why is persistency ratio so low for the life insurance sector?
Over last few years many leading players in the industry have done significant work to improve persistency. The numbers have shown improvement for many top players over last couple of years. But scope for further improvement is available. Improvement in operational efficiency like standing instructions for renewal payment, availability of many options to pay renewal premium and lower turnover of the frontline sales would aid further improvements in persistency.
5. What are your concerns about the Indian market that you want the regulator to address?
At this point, there are no major concerns which need intervention from the regulator. The continuous improvement in our services and processes is what we are focusing on right now.
6. Bancasurrance, is a dominant distribution channel for SBI Life. Recently, RBI has raised concerns on mis-selling by banks. What is your take on it?
Both RBI and IRDAI are concerned about mis-selling in banks. To address this challenge, RBI has made it mandatory in its Jan 2015 guidelines, that for all life insurance products, other than simple products, bank has to carry out need analysis for the customers. State Bank of India implemented this for its life insurance sales.
In addition to this, as an extra precautionary method, conducts pre-issuance welcome call to confirm that the customer has understood the product that he/she is buying. Both these steps ensure that the customer has made an informed decision.
These initiatives validate SBI Life's strong commitment towards prevention of mis-selling. However, we are also working towards further improvements in customer and sales force education so as to ensure that this issue is permanently resolved.