The need of the hour is to change mindsets from investment returns to protection, said Kapil Mehta, chief executive officer and managing director, DLF Pramerica Life Insurance. In an interview with our correspondent, he also discussed the opportunities and challenges that await the insurance sectors 21st entrant.
You are the latest entrant in the life insurance space. What opportunities and challenges do you see in this market?
We are the 21st player to enter this market. First, life insurance penetration in the country is at 4.8 per cent, which is pretty low compared with other countries. So there is huge opportunity even for new players. Second, if you ask a group of, say, 100 people, if they have life insurance cover, almost 60-70 will say yes. But ask a second question: in case something were to happen to them today, how many people have life insurance policies that will take care of their families for next 10 years or so? Just two or three people will be confident. This has been seen across geographies. People are just not aware of how much life insurance they need.
As for the challenges, it is critical for companies like us that have entered late to come out with innovative products, and to be careful in addressing customer needs.
Agents have always been the lifeline for the life insurance business. How to do plan to make the best of this channel?
We want to build a strong distribution channel that is high on quality and advice. Today when a life insurance conversation happens between an advisor and a customer, there is no clear understanding of what the latter needs. We can provide better advice through the way we design our sales process, the quality of people we attract, and the training we give them. We are also developing products that are flexible and uncomplicated.
We are also fragmenting the industry in ways that have not been done before. There are ways of looking at certain groups or geographical regions. There are very protection oriented plans like non-participating endowments that can be promoted. There are affinity groups that can be tapped. A lot can be done.
So far you only have two plans.
We have just started. In fact we have just had a soft launch in Delhi three weeks ago. So we need to add pension and health policies, and so on to our portfolio. We will complete our portfolio