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IDBI Federal Life Insurance Company is entering the group insurance space and also planning to file for an online product soon, according to its Chief Executive Officer and whole-time director, Vighnesh Shahane.
“We want to be a multi-channel company and these are areas which are growing in the industry,” Shahane told BusinessLine .
The company, which is a joint venture between the IDBI Bank, Federal Bank and European insurance major Ageas, is also building up a team for promoting its group insurance products. IDBI Federal Life now has an over 11,000-strong agency, besides a direct sales force of 250.
On the positive sentiment in the industry , the CEO said: “This is driven by a positive regulatory regime at the moment, the buzz about increase in the Foreign Direct Investment limit to 49 per cent and a stable political situation.”
The life insurance industry might register single-digit growth in the current financial year, he added. However, Shahane also sees challenges for the industry in the form trust deficit and sustaining cost-rationalisation ratios.
Interest in ULIPs returning The unit-linked insurance plans (ULIPs), which witnessed a steep fall after the regulator had brought in new norms, including cap on commission for agents in 2010, are also staging a comeback. “We can’t exactly quantify this at the moment but there is greater awareness on ULIPs now than earlier among the customers,” he added.
Recently, the bank-allied company launched a unit-linked endowment product christened Wealthsurance Suvidha Growth Insurance Plan aimed at the first-time ULIP customer and two other plans that offer guaranteed returns.
On capitalisation plans, he said there was no immediate need for the capital as the solvency margin was 472 per cent for the company as against the regulatory requirement of 150 per cent.
Claims IDBI Federal’s claims settlement ratio was 90 per cent last financial year. The repudiation ratio came to down to 5.47 per cent during the period as against 16 per cent in the previous year.
“We have also recently launched eight-day claim settlement guarantee. If a claim is not settled within this period, we will pay 8 per cent interest on death benefit,” Shahane said.
The guarantee is applicable if the policy has completed two years from the date of the policy inception to date of death of the life insurance and if the claim did not warrant any further investigation.
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