Rel Life to focus on traditional plans, agent productivity
New Delhi: Leading private sector insurer Reliance Life Insurance says it is focussing on traditional products and agent productivity to boost insurance penetration in the country.
Reliance Life, part of Anil Ambani-led Reliance Group's financial services arm Reliance Capital, has undergone a significant product portfolio change, with 80 percent of its business now coming from traditional products, and only 20 percent from unit-linked products.
"Currently, our portfolio comprises about 80 percent traditional plans and 20 percent ULIPs. We will continue to focus more on traditional products over ULIPs, with a view to boost the penetration of insurance in India," Reliance Life CEO Anup Rau said.
The company expects this trend to continue for some time, he said, adding that the new regulations make the traditional products more transparent and customer-friendly due to larger life cover and higher flexibility.
The Insurance Regulatory and Development Authority (IRDA) has extended the deadline of new product regulations for the life insurance industry to January 1, 2014, from October 1, 2013 earlier.
The new guidelines have categorised life insurance products into three broad categories -- traditional insurance plans, variable insurance plans (VIPs) and unit-linked plans.
The new guidelines have reduced commission on short-term policies, while commission amount has been linked to the premium paying period for all products.
Besides, the changes also aim at bringing traditional products at par with ULIPs in terms of charges.
"We have re-filed products based on the amount of volume generated, feedback from our distribution network and demand from our customers," Rau said.
"The new guidelines serve the ultimate and long-term purpose of life insurance -- protection and fulfilment of long-term goals. I am confident that they will promote need-based selling and higher life insurance cover, offer better surrender values and improved disclosures and provide simpler and more customer-friendly insurance plans," he added.
The company aims to expand further into rural India and Tier II and Tier III towns and cities.
At the same time, Reliance Life is also bullish about improved productivity of its over one lakh agent base across the country.