“Women distributers have greater potential to target Indian working women”

ICICI Prudential Life Insurance has underwritten an impressive 1.3 crore policies since inception. Tarun Chugh, Chief - Distribution, Operations and Marketing, discusses his future plan of expansion and challenges.

As a Chief of Distribution, Operation and Marketing, what are your key priorities?

Today, the major challenges that life insurance sector is facing are strengthening sales processes, retaining advisers and agents for long period, devising new ways of training and reaching out to wider population.

Our overriding priority is to accelerate growth by providing good quality of sales and products to the people. Also, I am focusing to increase our penetration in small cities and towns. In fact, our team is working on a micro insurance product to cater to the small town and rural segment.

Life insurance premium collection is declining for the past two years. What are the reasons for this?

Since GDP growth and savings rate have slipped down, many sectors have been suffering from revenue crunch including life insurance sector. However, I expect that the sluggish insurance market will be back on growth track by the end of this financial year as the June premium collection has shown some sign of revival.

Though the new products under IRDA’s new product guidelines are likely to hit the market by October 1, 2013, the sales of existing products will increase since agents and customers will take some time to understand the new products. Therefore, I am very hopeful that premium collection of July, August and September collection will go up. In fact, we have recorded a 5 percent growth in July.

Over the years, IRDA has set ceiling on the payouts to distributors. How has this impacted the sales of your products? Which products have been impacted the most?

Adviser productivity is a major challenge. How do you deal with advisers with low productivity?

Adviser productivity is always been a cause of concern for the industry. Regular training and skill upgradation sessions are conducted, they are trained to understand the requirements of the customers and present relevant solutions rather than just sell a product. This shift in the way customers are approached not only increases their productivity but more importantly enables them to deliver better service to customers. We have introduced tablets to our distributors which facilitate conducting a need analysis, product comparison, electronic benefit illustration etc. This helps in developing a plan to meet long-term financial objectives. Technology has enabled us significantly enhance agent / distributor productivity and deliver high quality service to customers.

How do you control mis-selling of your products? What are the checks and balances in place that ensure that your brand does not get hurt?

Policyholders may not be aware about the basic features of the policies such as term of premium payment, cash surrender value, regular premium, single premium etc. The digital platform we have developed address most of these areas. A customer purchasing a policy gets an instant notification about the features of the product(s). We have ensured that transparency has been built in. The regulator too has been proactive in trying to arrest the issue of mis-selling; the standard proposal form is one such initiative which the regulator is working on. This will ensure that customer’s hard earned money is gainfully used to achieve the set financial objectives.

What will be the impact of upcoming service tax regime on the life insurance business?

The imposition of service tax will not deter policyholders to buy an insurance policy. Insurance is not a push product - it’s a need of people. If person is paying Rs 1000 premium today, he/she will not discontinue their insurance policy for a mere Rs 30. Another advantage with insurance policies is that it provides tax benefit.

Life insurance companies are filing for new product approvals. What new products have you applied for?

On the basis of market demand and customer’s need, we have applied for a range of products in child space, wealth creation and pension products. We are also looking to add specific features such as option of liquidity and long term income flow in these products.

Recently, insurance council has recommended financial ministry to allow banks to sell products of five insurance companies. How will it impact the industry if implemented?

Currently, the bancassurance model permits corporate agents (banks) to sell insurance products of one life insurer and one general insurance company. Permitting banks to sell products of more than one life insurance company will boost penetration of life insurance, simultaneously it will also mean that customers will get better service. The industry has to ensure that the customer interests are protected at all times. Ultimately, what is good for the customer is good for the industry. 

How many agents do you have? What are your plans on strengthening your distribution team?

At present, we have 1.5 lakh agents across the country. We have a strong presence in 520 districts. We are also looking forward to empanel more insurance agents. However, our main focus is to empanel more and more women agents as they have greater potential to target the growing number of working women professionals.We believe that the acumen of our agents / distributors coupled with the digital solutions we have deployed, offers a compelling proposition to customers. We offer an array of products and customers can opt for the product which best matched their life stage requirement. With the selection of the right products or a combination of products our customers will be able to plan better for their future financial needs.