For the life insurance industry, one of the few bright spots in the economy currently, the slowdown has been a good time to refocus its priorities. As heady economic growth numbers taper down, the industry is back to the basics of making invested capital work. As the equity markets have tanked, unit linked plans—the engine for growth in recent times—have taken a back seat. However, the CEO of a top insurance company says, “from a posttax perspective ULIPs will continue to be attractive.” That apart, for existing players it also means that instead of chasing new business, the focus is now on profitability and metrics such as persistency and agent productivity.
Insurance expert, Ashvin Parekh of Ernst & Young says: “Even the senior management is now getting involved in discussions regarding efficiency-related service offerings.” Many insurers are looking to reduce acquisition cost and shift to higher allocations as a first step. Also rather than adding new offices, companies are aiming to up productivity. While for some it means investing in efficiency programmes, for others it translates into retraining agents. Aviva India, for instance, is bringing in experts from its team in Sri Lanka to spruce up productivity in India.
. ULIPs have taken a back seat.
. The focus is on profitability instead of chasing new businesses.
. Firms are looking to up productivity.
. Experts are being invited to retrain agents.
—Shalini S. Dagar