Govt has formed a high level panel under IRDA chairman SC Khuntia to bring about wide ranging fresh set of reforms in the Indian insurance sector? What are you suggestions to the panel on reforms required for the Indian insurance industry?
IRDAI is constantly bringing about positive measures in the insurance sector to enable more Indians take advantage of the benefits of life insurance. For instance, it has introduced guidelines for POS products where easy-to-understand simple products are being rolled out for customers with minimal underwriting. Adding to this, the revised product regulations, last month, further enhances life insurance products’ proposition for policyholders.
The revised regulations allow up to 60 per cent commutation on both ULIPs and traditional pension products, enabling policyholders in getting a lump sum amount as retirement benefit on the vesting date (maturity), and provide them greater liquidity.
The regulator also increased the revival period from 2 years to 3 years for ULIPs and to 5 years for non-ULIPs products providing policyholders a wider window to revive their policy.Further, the Regulator’s inclination towards adopting innovation can also be seen in its recent announcement on sandboxing.
I believe sandboxing will enable insurance companies to experiment with new products and innovative business models for bringing more value to the customers. In fact in the coming years the industry should focus on product innovations, especially in the pension space and bring in simple and holistic life insurance solutions to enable customers fulfil their retirement related life goals.
Are customers now favourably disposed towards insurance products?
We are steadily seeing a difference in the way customers are viewing life insurance. In fact in our recent study – Bajaj Allianz Life India’s Life Goals Preparedness Survey 2019, life insurance emerged as the most preferred investment option for millennials for achieving their life goals. The reason behind this trend can be the many changes and innovations within life insurance products making them value-packed.
Today, life insurance products not only offer protection, but are also seen as an investment tool for creating wealth, made more lucrative with the several tax benefits as compared to other investment products. Combined with the fact that life insurance inculcates long term disciplined investment towards life goals, millennials and other investor groups are preferring life insurance products.
Today we are also seeing more and more life insurers invest in digital assets designed for enhanced customer delight. I believe this 360 degree approach towards ensuring customers’ benefits is making life insurance a more preferred investment product.