The Hindu Business Line : Chidambaram launches NIC mediclaim policies

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Chidambaram launches NIC mediclaim policies

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`Insurance cos should adopt innovative marketing strategies'

THE UNION Finance Minister, Mr P. Chidambaram, talking to a school girl after handing over the National Insurance Company Ltd's (NICL) `Vidyarthi Mediclaim Policy' in Hyderabad on Friday. Also seen are (from left) Mr C.S. Rao, Chairman of IRDA, and Mr V. Ramasaamy, Chairman and Managing Director of NICL. — P.V. Sivakumar

Hyderabad , Nov. 3

When toothpastes and white goods products are test-marketed before launch by companies, why not insurance products?

Posing this question to the insurance and banking industry, the Union Finance Minister, Mr P. Chidambaram said, "Financial products also should be test marketed. How different are they from consumer products".

Mr Chidambaram said insurance companies need to adopt innovative marketing and management strategies to promote new products. The penetration of insurance in the country was rather pathetic. It is the failure of the insurance companies to communicate the benefits to the common people properly, he said.

Making these comments after launching the `Vidhyaarthi Mediclaim Policy'(for students) and Parivar Mediclaim (families), introduced by the National Insurance Company Ltd here today, the Finance Minister said at Rs 18,000 crores last year, the Indian insurance penetration accounts for just half a per cent of the country's GDP. Compared to world average, it is one hundredth in many areas, and therefore has a long, long way to go.

The Union Government is finalising a comprehensive insurance bill, which would be introduced in the Winter Session of Parliament. It will revisit the 1956 Life Insurance Act, the 1998 IRDA Act and other Act's and make suitable amendments to ensure that the sector gets the much needed fillip.

Similarly, he advocated detariffing in the insurance sector. There are still some hurdles to be crossed. Ideological and blinkered opposition perhaps is not required. It is important to embrace reforms and push for a more liberal regime, Mr Chidambaram said, while urging the IRDA (Insurance Regulatory Development Authority), to put in adequate safeguards so that no player is hurt in the detariffing process.

The Finance Minister urged insurance companies to go to tier-II and tier-III cities and towns to promote the products. Insurance means long-term saving from the financial angle, which in turn can contribute to the country's economy, when the funds are properly invested.

The Chairman, IRDA, Mr C.S. Rao, in his remarks said once detariffing takes place greater competition among the insurance companies would ensue and it would lead to a variety of personal lines of products, which have been neglected for the past three decades.

The detariffing of general insurance from January 1, would be a major milestone. He hoped that the public and private sector insurance companies would raise to the occasion and meet the challenges.

Earlier, the Chairman of NIC, Mr Ramaswamy, said the Vidyarthi Mediclaim Policy would cover students' hospitalisation expenses and reimburse personal accident expenses of both students and their guardians. Kennedy Public School in Hyderabad students were given the first set of policies by the Finance Minister.

The Parivar Mediclaim for families is a hospitalisation policy for individuals with family of self, spouse and two dependent children. The NIC was hoping to launch the third for senior citizens on December 5 coinciding with the centenary year. It was pending with the IRDA now.

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