Year 2010 has been a defining year for the life insurance industry. Insurance regulator IRDA has brought about significant changes to life insurance regulations in 2010 that will change the face of life insurance industry in India.
The regulatory changes have also put significant pressure on intermediary margins. We see this as a challenge to attract quality talent going forward. To build a career agency model, it is important that the intermediaries are adequately compensated to make life insurance as their primary or only career.
The changing customer attitudes towards financial instruments - and a low-risk appetite resulting in their gravitating towards guaranteed products - was another challenge. This required a complete new effort to understand customer behaviour and design products and communication to this new customer reality.
One of the challenges will be attracting and retaining quality talent. With significant regulatory changes and the change in business environment, life insurance is not the most preferred career option for both intermediaries and employees.
The industry will have to work towards creating higher confidence among employees and intermediaries to build them as brand ambassadors.
The overall economic indicators are positive and this promises healthy growth in 2011. The RBI recently announced that growth rates would be sustained in 2010-11 and GDP growth is expected to be around 9 per cent. A larger amount of money would be available to financial services companies. Life insurance has also emerged as a preferred financial instrument among younger people - an increasing number of people in their 20s are buying life insurance. Increased customer focus on long-term protection and savings will enhance the customer value proposition in life insurance. We expect this to translate into greater customer preference towards life insurance to meet their long-term life stage needs.