Insurance Regulatory and Development Authority (IRDA) is working towards guidelines in several areas as pointed out by the finance minister in October in a bid to provide a fillip to the industry.
While the guidelines are awaited, Malay Ghosh, president and ED, Reliance Life told Sandeep Singh of The Indian Express that even as the environment remains gloomy and commitment from investors for long-term schemes is on a decline, there is optimism going ahead. Excerpts:
How optimistic are you while running a business in an economic and political environment that we have now?
Personally, I think that our country is growing at 5.5 per cent at a time when others are growing at far lower rates. So, if I have to grow my money and business I have to be in India as it is predominantly an underpenetrated market for banking, insurance, mutual funds, etc. As the country grows, incomes at the hands of people will grow and the demand for financial products will increase. So there is a clear opportunity for everyone.
What are the challenges you currently face?
At this point of time, people are not very enthusiastic about savings and savings rate as a percentage has gone down. It has something to with middle class not having too much money at hand because of inflation and uncertainties around earning. In fact, as of now a commitment for a long-term scheme is slightly less than what it was a few years ago and I would think that it will come back in the coming years.
Also, peoples needs and requirements are changing, at some point they wanted unit-linked plans and currently they are staying away from Ulips, so we have to work accordingly.
How do you think things will improve after the new guidelines come up on the issues that were highlighted by the finance ministry in October?
Product approvals are currently taking a lot of time as the process is quite interactive with several layers of approval. So once the use-and-file process is launched, the product approval process should get streamlined.
Another key area is Open Architecture Bancassurance which is long overdue and IRDA is working on it. Some agreement has been reached between government and IRDA and hopefully something workable comes out of it.
We have requested to see that banks open to at least four insurance companies of the same class, if not to all