At a time when the private life insurance industry is witnessing growth in sales of unit-linked insurance plans (Ulips), Bharti AXA Life Insurance is selling only traditional products. Sandeep Ghosh, MD and CEO of the private life insurer, feels that given the company’s current distribution channels, there is a predisposition to sell traditional products. Edited excerpts from an interview:

Bharti AXA Life has seen a marginal dip in individual premium collection in the last six months ending September, while private insurers are showing growth. What do you attribute this to?

Individual new business premium collections have been flat because we are selling mostly traditional insurance policies. The companies showing staggering growth are selling predominantly unit-liked insurance plans. Traditional policies as a segment have shown de-growth. We don’t have a bancassurance partner, which has been the biggest channel of growth on the back of Ulip sales. The other reason is that we are coming out of two years of growth that was far ahead of the industry.

Why is Bharti AXA focussed on selling only traditional products?

I am not getting into a philosophical debate over whether Ulip is good, as I believe for certain customers Ulip is good while for others traditional products may be better. But my channels of distribution today are not what I would ideally like to have, as they support traditional plans. So, given the channel mix and the profile of our agents and brokers there is a predisposition to sell traditional plans though we have a strong Ulip plan in our portfolio.

But for us to successfully sell Ulips in a sustainable and profitable manner, we need a different set of channel partners. The new IRDAI regulations allow banks to tie up with up to three insurers. However, banks have not been tying up with other insurers…Principally, in the life insurance sector, voluntary open architecture is always going to have limited takers since many of the bigger banks are in JV with insurers. 

Most of the foreign banks have also done international deals with an understanding of exclusivity with their insurance partners.

AXA has received FIPB nod to raise stake in Bharti AXA Life. When do you expect the process to be completed?

The stake sale is imminent and we don’t anticipate any bottlenecks as shareholders have agreed to the sale. We are completing the process. 

What is your growth outlook for both Bharti AXA and the industry?

 We expect the industry to grow 10-15 per cent, while at Bharti AXA Life we expect 25 per cent growth next year. We are looking at expanding our branches in areas where we don’t have a physical presence, from 120 branches progressively to 150. We are looking at hiring more agents and at bank tie-ups.

What innovations are you looking at?

 We recently launched a single premium product, which has been designed specially for the mobile platform. Though there are products on the Internet that can be bought on the mobile, the interface may not have been designed for it. Here, the whole policy form has been designed keeping the mobile in mind.  So, the uniqueness is not in the product but in the product delivery process, where we have brought in the innovation. 

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