Life insurance companies are betting on new products to drive premium growth after a modest 2 per cent year-on-year growth in individual-rated new business in April and May.
Data collected from the industry shows that the total amount of individual-rated new business for the year-to-date period in May was Rs 10,613 crore compared with Rs 10,402 crore in the corresponding period the previous year. While the private sector has grown 5 per cent, there was a 3 per cent contraction for LIC.
Tarun Chugh, MD and CEO of Bajaj Allianz Life Insurance, said there has been a distribution lethargy after the surge in business in March due to insurance policies with aggregate premiums above Rs 5 lakh becoming taxable from April onwards.
“In March because of the tax change, lots of HNIs went ahead and invested in Rs 5 lakh and above policies. So, the growth of the private sector was 24 per cent last year.
“It has now become an interesting challenge to get our distributors out in the market talking to customers and hence the orientation this year has been a little different. The way we are looking as a response to this kind of distribution lethargy is by frequently launching new products and offerings,” Chugh said.
Among its recent launches, Bajaj Allianz has introduced a protection plan for type-2 diabetic and pre-diabetic individuals and a small cap fund in the Ulip segment.
Aditya Birla Sun Life Insurance has introduced a guaranteed pension plan, while Max Life launched a non-linked participating savings plan.
Aegon Life Insurance has come up with a cover for surrogate mothers and egg donors and ICICI Prudential has a debt fund for Ulip investors.
Use and File
The new launches are supported by the use and file procedure which allows the life insurers to bring new products into the market faster without prior approval of regulator IRDAI.
IRDAI last week has further simplified the use and file procedure by extending the benefit to the group and individual unit-linked insurance products offered with new funds as well as combi products where the life insurer acts as the lead.
“This is a continuation of a series of steps that the regulator has taken to strengthen insurance penetration. This modification will enable insurers to stay in sync with the demands of today’s customers,” said Sumit Rai, MD and CEO of Edelweiss Tokio Life Insurance.
“By including new product categories and combi plans and allowing new funds to be added to existing Ulips, the regulator has opened doors to promote agility and innovation in the industry,” said Satishwar B., MD & CEO, Aegon Life Insurance.
