Max Life Insurance’s CEO and MD Rajesh Sud says life insurance companies still have to deal with uncertain times as the regulator has not come out with clear guidelines, which could lead to a muted growth in new premium segment. In an interview with Aftab Ahmed, Sud said if current indication from Irda is to be believed, it would amount to getting approvals for 400-450 products. Excerpts
Revenue was up 1% in first half of the year. Do you see any improvement ahead?
Revenue generation has two parts — the new premium and the renewal business. If I look at the nine-month number, we were flat or slightly in the negative zone in new sales, but our renewal business segment is growing. Until there are positive news coming for the industry, it would be difficult to see new sales growing too much for the industry.
New premium growth has fallen. What is your target for new premium growth?
It is hard to take an absolute number. Compared with the industry’s growth figure, we have outperformed in the last three years. We are number-one company for the sixth consecutive year in terms of conservation ratio, which means we have been able to retain our customers. New sales are only one-third of our business, and two-thirds are now from customers renewals.
The industry has been affected after Irda tightened the norms. Do you think there is more clarity and relief from the regulator now?
We are yet to see the final draft of the product guidelines that Irda has cleared. If the last draft version of the guideline is implemented, it would mean about 400-450 products in the industry may have to go through a change. That is a massive task — first to design the change, get it approved and to train the field staff to implement the change. As we saw in 2010, too little time was given to implement the changes. I don’t think we can call it a relief at this point in time.
Do you see a pick up in the business in next fiscal?
I feel, the first positive thing would come from regulatory issues getting settled and clarity emerging on that. The other thing we are hopeful is the Union Budget, where we have been arguing the life insurance industry has a very big role to play in mobilising small household savings and putting them to work for long-term investments