Money & Banking

‘There’s a shift from physical assets to the financial side’

NS Vageesh Mumbai | Updated on January 27, 2018

Amitabh Chaudhry

Both mutual funds and insurance companies have benefited from the shift, says HDFC Standard Life Insurance’s MD Amitabh Chaudhry



The life insurance industry has been on a roll during the past year, brushing aside the effects of an economic slowdown as well as the shocks of demonetisation. The industry is also entering a new phase with a couple of companies having got themselves listed on the bourses. Amitabh Chaudhry, MD and CEO of HDFC Standard Life Insurance Co., which has been among the top three players (both in profitability and market share) over the past few years, and which was also one of the companies which went public a little over a month ago, spoke to BusinessLine on the recent trends and outlook for the life insurance industry. Excerpts:

How has this year been for the industry?

It has been a pretty good year. There has been 30 per cent growth this year for the industry so far. We thought that after the bump last year post-demonetisation, there may be a slowdown this year.

We have been pleasantly surprised by the growth that we have seen and it is clear that there is a shift from physical assets to the financial side.

Both mutual funds and insurance companies have benefited from the shift to financial assets. I think we (the insurance industry) are relatively better placed because we have spent a lot of money in distribution. If you look at the offices or at the bancassurance partnerships or even the online platform, we have been able to reach more number of people.

We have more people on street. Insurance industry, let’s not forget, is a very under-penetrated industry and we have that difference in distribution strengths which people underestimate. So, if by chance, the markets turn the other way, the insurance industry will still continue to do well.

How has the listing of top players, including your company, made a difference?

The listing of three companies (SBI Life, ICICI Prudential and HDFC Standard Life) and another three players whose holding companies are listed (Birla, Bajaj and Max), gives investors a better view.

As more companies list, there is no doubt a pressure to perform. But it also brings a higher level of corporate governance. It also provides an opportunity to help educate investors about the industry.

Take, for instance, our example. We had 12 lakh retail shareholders — now we can talk to them about our insurance products. It has helped expand our reach. Our reach has expanded tremendously in the last couple of years.

From now on, even as we live quarter by quarter, we also cannot forget that we are building a long-term business, backed by a clearly articulated vision and strategy.

As long as we keep executing well, our investors will stick with us. I tell our people that the listing makes our responsibility even greater than before. The market provides an extra sounding board.

A committee that reviewed product regulations (chaired by you) submitted a report to the IRDAI last week. What are its highlights?

We have talked about different ideas for the regulator on the product side. We have looked at investments, surrender value, specific product propositions, use and file regulations, etc.

We have kept the focus on the customer, ensure that he/she wins and suggested that entry and exit should be easy and at low or no charges.

We have taken a 10-year view and tried to look at what the expectations from customers are and how we as an industry should prepare for them.

We are competing with other financial products and we have tried to address IRDAI’s concerns, suggested mitigations without impacting the customer in any negative way.

Published on December 24, 2017

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