Life Insurance Industry spearheads with “Customer Centricity”

8082013

 Life Insurance Industry Spearheads with ‘Customer Centricity’ as Key Focus Area

• Steady decline in Number of pending grievances to less than 1%.
• Healthy increase in Renewal Premium to INR 1,79,831 crore as on March 31, 2013.
• Total Payout to customers risen to INR 1,91,336 crore as on March 31, 2013.
• 900%  phenomenal growth in AUM since opening up of sector.
• 350% rapid growth in Inforce policies since opening up of sector.
• 72% branches in rural and semi-urban geography.

Delhi, August 8, 2013:  The 24-Member Indian Life Insurance industry, the biggest retail financial service providers in India, with around 36 crore in-force policies, the largest in the world, and strikingly conscious of expanding rural footprint (more than 72% branches in rural and semi-urban geography) for inclusive growth, is now embarking nationally and spearheading the next big step to make ‘Customer Centricity’ a key focus area.

Life Insurance industry, riding on the growth path that has been spurred by product innovation and multiple distribution channels, is now making a concerted effort towards being Customer Centric in its approach by adopting Internationally accepted six principles –

¾  Increasing overall confidence – Embed TCF (Treat Customers Fairly) in corporate culture.

¾  Meeting Customer Needs – Products and services marketed and sold are designed to meet the needs of customers.

¾  Clear Information – Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

¾  Suitable Advise – Create awareness and inculcate behaviour in distribution for promoting Need Based Selling.

¾  Product Performance – Review of performance of funds.

¾  Post Sales Barriers – Continued focus on improving complaint management process.

To implement the above customer centricity initiatives, Life Insurance Council plans to carry out a Nation Wide Campaign. As a part of the campaign, Life Insurance Council is contemplating to request Members to provide training to its employees and use the TCF measures to motivate them to do effective customer service at all levels. TCF programme would be successful only if appropriate education is imparted to customers too, so that they could become responsible counterparties. Accordingly, we plan to organise customer meets as also training for intermediaries too, across the country to create synergies and build better understanding on the Life Insurance segment.

Mr V. Manickam, Secretary General , Life Insurance Council, the industry body of life insurers in India, said: “The Life Insurance industry would reinforce customer centricity at every step, be it creating awareness by improving financial literacy, need-based service & addressing effectively customer grievances etc. As a matter of fact, there has been an improvement in death claims settled by Life Insurers in terms of number of policies as also by amount in the past three most challenging years. There has been improvement in the time taken to settle death claims as well as the number of claims repudiated too has seen a significant drop. ”

“Currently life insurance penetration is 3.2% (2012-13) and life insurance density is 43$ (2012-13). By implementing the customer centricity initiatives we are confident that these would help in increasing life insurance penetration to 5% and density to 100 $ around 2020” Mr. Manickam further added.

Customer Grievance Redressal through Integrated Grievance Management System (IGMS) has been successful with no of grievances attended rising, and the number of pending grievances steadily declining to below 1%.

The Four-Pronged Regulatory changes in recent years have brought renewed focus on Customer Centricity - be it, protection-oriented like making sum assured at a minimum ten multiples, and offering guaranteed surrender value, or transparency-oriented like forming a policy-holder protection committee or making benefit illustration mandatory for all products, or even investment-oriented relaxing investment guidelines for exposure to infrastructure, or need-oriented like measuring product suitability matrix before making any recommendation.

The Life Insurance industry also witnessed spectacular growth in AUMs, with investments that have been targeted towards deployment of funds enabling infrastructure growth in the country. The AUMs of Life Insurers has risen to INR 17,41,175 crore as on March 2013 as compared to INR 1,94,010 crore in 2000-01 with a phenomenal growth of around 900%.

For the 11^th Five Year Plan, Life Insurance sector has provided more than INR 7,25,000 crore as long-term funds for infrastructure development of the country.

While the Indian Life Insurance industry, which has immense growth potential compared to other countries, has witnessed a stable growth in total revenues over last two years, one of the most challenging period, there’s been a healthy increase in renewal premium to INR 1,79,831 crore as on March 2013, compared to INR 1,65,240 crore in March 2011. The in-force policies have also increased to 35.87 crore as on March 2013, compared to 32.54 crore two years ago and registered rapid growth of 350% compared to 1999-2000, when the sector was opened up for private sector participation. This signifies that increasing number of customers have reposed trust and confidence on the Life Insurance Industry.

The total benefits paid to customers by Indian Life Insurance industry in most challenging period, has increased to INR 1,91,336 crore as March 31, 2013 as compared to INR 1,41, 806 crore as on March 2011.

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