Varun Gupta, President & Chief Distribution Officer (CDO) – Bancassurance, IndiaFirst Life
Though role of Bancassurance has grown significantly in the Indian life insurance industry, IRDAI, Insurers and banks need to continue to work together to enhance customer awareness, ensure engagement based on actual needs, and implement responsible selling practices at every stage, says Varun Gupta, President & Chief Distribution Officer (CDO) – Bancassurance, IndiaFirst Life
Both the Government and IRDAI have recently expressed serious concerns over the issue of mis-selling of insurance products by banks. How do you view this issue from an industry and distribution perspective?
The Indian insurance sector is booming, with the private life insurers having grown by 15% CAGR in Individual new business APE between FY20 to FY25. The surge is owing to numerous factors, and Bancassurance has played a critical role in making this possible.
For FY25, Bancassurance has registered a strong 11% growth and contributes ~50% of Individual new business APE of private life insurance industry. This corroborates the role of Bancassurance in increasing insurance coverage across the country by leveraging the wide reach and inherent trust within banking relationships.
During the last 10 years insurance industry has undertaken focused efforts towards reducing grievances through improved regulations, changing channel mix, enhanced digital journeys, and responsive service models.
As per IRDAI annual report 2024, in the past decade the total grievances on 10,000 number of policies sold have come down from 1.08% to 0.42%. Insurers are also observing significant improvement in 13M and 61M persistency ratios with focus on long term relationships, improved onboarding controls and sales ownership.
Insurers and banks will continue to work together to enhance customer awareness, ensure engagement based on actual needs, and implement responsible selling practices at every stage.
IRDAI is reportedly planning to introduce new regulations to curb mis-selling practices. Based on your experience, what suggestions would you offer to make these proposed regulations more effective?
IRDAI’s initiative to introduce new regulations aimed at curbing mis-selling practices within the insurance sector is crucial for fostering deeper trust and long-term credibility in the industry. Some of the recent regulations include introduction of 30-day free look period, mandating the Pre-Issuance Video Verification Call (PIVC) to the customer, and collection of premium post communication of underwriting decision.
Our experience shows that transparent disclosures, robust last-mile training, and a consistent focus on need-based selling significantly enhance the quality of engagement with the customers. Mandating thorough suitability assessments will guarantee that customers receive products truly suited to their needs. Simplified product communication is essential, enabling customers to make informed decisions confidently.
Additionally, linking distributor rewards to long-term policy performance will reinforce trust and encourage a commitment to #CustomerFirst practices.
We need to also take an outside in view and learn from the global best practices. For example, the Monetary Authority of Singapore (MAS) implemented the Balanced Scorecard (BSC) framework to promote fair practices in the financial advisory sector, ensuring that representatives and supervisors act in the best interests of their clients.
We can institute a similar model in India, which will establish a set of standards, audit procedures as well as remedial actions to all the representatives of Insurance companies and banks who distribute savings and investment products.
What proportion of IndiaFirst Life’s premium income currently comes from the Bancassurance channel?
With over 22,000 bank branches through partnerships with Bank of Baroda, Union Bank of India, and Regional Rural Banks, we serve customers across ~90% pin codes in the country.
Bancassurance contributes 75% of IndiaFirst Life’s overall business. Our innovative thinking has elevated us from a Bancassurance dominated company to a multichannel distribution organisation.
IndiaFirst Life is progressively becoming a multi-channel distribution player in the industry. The transition is visible as the Bancassurance contribution has tapered from 94% in FY23 to 79% in FY25.
Could you please update us on the status of IndiaFirst Life Insurance’s proposed IPO?
IndiaFirst Life will get listed when the company’s board and the shareholders deem it beneficial and agree to do so. Market conditions and the demand for this sector will also influence the time of the listing.
What are your key business plans and strategic priorities for FY 2025–26?
IndiaFirst Life’s strategic objectives include building a multichannel distribution mix, providing superior customer experience, being amongst the top 100 Great Places To Work, and becoming an industry leader in harnessing technological disruptors.
We’re committed to enhancing productivity across partner networks by investing in frontline training, leveraging analytics for sharper customer targeting, and strengthening service delivery.
Our north star remains consistent across the distribution channels: to build a trusted, tech-enabled, and customer-first insurance experience.
Furthermore, we have recently launched our partnership philosophy, “Accha Karte Hain, Saccha Karte Hain… Hamesha”, which perfectly embodies our 15-year legacy and our endeavour of creating lasting impact in every life we touch.