Malay Ghosh, Executive Director and President, Reliance Life Insurance Company Ltd shares his new distribution strategy - Part 2
How do you plan to compete with LIC?
We do not want to compete with LIC. We are a young country where a large section of our population is uninsured. A lot of players will be required to tap these customers.
We are currently in the second position in the life insurance segment and I am confident that we would be number one by the end of this fiscal.
We have invested significantly in customer service and I am proud to tell that we have been rated second when it comes to customer service.
What is your strategy to reach the top position?
We do not focus on group insurance. Under individual insurance, our single premium is about 15 percent to 20 percent. We are more focused on traditional products. Last year 50 percent of our revenue came from traditional products. So far in the current year, the contribution of traditional product has been 72 percent.
Traditional products provide excellent cash flow to the company but do not provide high premium because we distribute these products mostly among middle class. Our average premium for traditional products is Rs.10, 000 while for other insurers it is around Rs. 40, 000.
We expect our new business premium to grow by 10 percent to 15 percent and cross Rs.3500crore revenue for the current year.
What distribution strategy are you planning to implement to be number one?
Apart from the regular distribution model we are also rolling out a‘rural career model’ were we will be recruiting 6000 advisors on fixed monthly stipend. This model is specially for roping-in women advisors and I expect 80 percent to 90 percent of them to be women in the age group 30- 40 years. They would work for 4-6 hours a day. They will be given two days compulsory training before they are on field. We have already rolled out this strategy in 15 places and we are looking to add more. Currently, 600 people have already been recruited in the first batch.
A media report said that the company is looking at launching fixed benefit health insurance product; can you kindly elaborate more on this?
It is an advanced version of critical illness rider. In case of hospitalization over 24 hours, unless it is self-infected depending on the disease, a fixed amount will be paid to the policy holder irrespective of the expenses you incur in the hospital. In a normal mediclaim policy, your reimbursement is restricted to what you spend.
Have you been able to zero down on any banks for bancassurance tie-ups?
We are actively talking to three banks which are critical in size. Our strategic partners are already in a big way in the bancassurance space and would assist us in choosing our partner.
How do you plan to cover up Rs. 129 crore losses which you reported in FY11?
I am confident that we will be profitable this year. As a life insurance company, this is the biggest achievement. Losses have been drastically coming down.