The Insurance Regulatory and Development Authority (IRDA) on Friday asked insurance companies to aim towards financial inclusion for growth. It also urged the industry for best practices and alignment of products with customer requirements.
Pointing out that micro-insurance was a critical area for growth, financial inclusion, which reaches out to the economically weaker section of the society, should be the base on which policies were being drafted, said IRDA Chairman J. Hari Narayan while speaking at the 12th insurance summit organised here by the Confederation of Indian Industry.
Mr. Narayanan said the performance of group products by a company was usually worse than individual products. Thus, the need of the hour was to align customer requirements with company products.
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The regulator highlighted the issues faced by the industry and said that bank assurance measures and practices needed to be strengthened. Mr. Narayanan said the report on valuation guidelines would be issued soon. He also mentioned that the Bill seeking increase in foreign direct investment in the insurance sector should be passed soon.
Mr. Narayan further added that evaluation of insurance companies was needed and the IRDA was formulating a standardised format to be followed by all companies. Raising concern over heavy dependence on agents, he called for alignment of policyholder expectations and initiated a discussion on a commission based system versus a fee based system.
Mr. Narayan made several observations, taking a look at the issues on profitability, distribution channels and their reward as well as growth of the sector and also deliberated on the possible Parliament approval of the Insurance Amendment Act.
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T. S. Vijayan, Chairman, CII National Committee on Insurance and Pensions, and Chairman, Life Insurance Corporation of India, spoke on how the Indian insurance industry is at an exciting phase and needs to take a keen look at financial inclusion, regulator policies, popularising non-life products etc.
He further added that the industry was dynamic and had come a long way from an established monopoly to wide liberalisation.