You launched at a time when the economy was headed for a slowdown and one of your firsts was a term plan. Being a new entrant, how difficult was it to sell a pure insurance product?
We launched with the campaign of “underinsurance”. So, our focus wasn’t on products, but on the fact that people needed to be sufficiently insured. That’s the reason why we launched with a term plan. But we did launch the more popular unit-linked insurance plans (Ulips) very soon. We launched in July 2008 and garnered Rs100 crore in premiums by October that year. We sold 38,000 policies in that period, 25% of which were term plans.
The insurance industry has a very high rate of lapsation, mostly because of unbridled mis-selling. What checks do you have in place to arrest cases of mis-selling?
To begin with, I feel only a small section of agents are involved in mis-selling. At our end, we focus on transparent documentation to ensure the customer knows what he is buying. We insist that every piece of document—be it the brochure or the sales illustration—is signed by the customer so that we can safely assume the customer would have gone through the finer points. We also call up the customers to enquire whether they have understood the plan. By now, we have around 5,000 agents and we haven’t encountered any serious case of mis-selling.
On an average how many visits do your agents make to sell a policy and how many policies are sold in a month?
Our agents make around four to five visits before selling a policy. They sell about two-three policies a month. Our focus is on profitability of business and we focus on persistency. We insist on performance, not just overall, but for each of our branches.
How do you ensure persistency? By focusing on branches to perform, aren’t you leading the agents of that branch to make frantic sales in order to meet targets?
We focus on renewal commissions. We tell our agents that they need to get loyal customers since renewal commission is an important stream of income. They needn’t make frantic sales if they can ensure a loyal string of customers. This is what I mean by profitability of business.
Since last year, a lot of guaranteed Ulips have hit the market. Is this trend likely to continue next year as well?
Guaranteed products were launched to offer reassurance to investors in the wake of the downturn. This year, too, the markets have been volatile and guaranteed products are still in demand. I feel next year, too, the trend will continue. We have only one guaranteed product, which is closed-end.