Rajiv Takru, Secretary (Financial Services), Ministry of Finance has assured that the ministry would consider taking up the matter with the Insurance Advisory Committee of IRDA.
At a recently held event ‘Insurance Agenda’, organized by Bloomberg TV leading insurance companies requested Rajiv Takru, Secretary (Financial Services), Ministry of Finance to allow more flexibility in investment to enable them to compete with other financial products like mutual funds and bank FDs.
Takru assured them that the ministry would consider taking up this matter with the Insurance Advisory Committee of IRDA. Takru also invited insurers to give their responses and suggestions in the matter.
During the event, Sandeep Bakhshi, MD & CEO, ICICI Prudential Life Insurance, said that the insurance industry is facing tough competition from other investment avenues like mutual funds and bank FDs. Due to attractive returns on such products, investors expect similar returns from insurance policies which is not feasible because of limitations in fund allocation, he said.
Amitabh Chaudhry, CEO, HDFC Life, seconded this view and said that customers are not satisfied with the returns since many of them compare insurance policies with other investments products. “Since insurance policies are long term products, the chances to compete with other investment avenues like mutual funds and FDs over a period of time are much better. Countries those have flexibility in fund allocation are giving optimal returns to policyholders thereby benefiting insurance companies.”