Even as competition intensifies in the domestic life insurance sector, ICICI Prudential Life (ICICI Pru) has maintained its top slot in the countrys private sector life insurer segment. Shikha Sharma, managing director & CEO, ICICI Pru, in an exclusive interview, speaks to Kumud Das of The Financial Express about the broad changes taking place in the life insurance market.
How has your performance been in the first half ?
We will be declaring our half yearly numbers, shortly. For the five months ending August 31, 2008, we continue to lead the private segment and sustained our dominant position in the industry with a market share of 13.7% (Source: IRDA, weighted new business premiums for individual business). Our comprehensive product portfolio combined with our service propositions and prudent investment strategy not only attracts new consumers but ensures they remain with us. This is reflected in our growing base of policies and assets. As on August 31, 2008, we sold over 8 million policies and managed assets to the tune of Rs. 30, 000 crore. Our presence across the country through 2,050 branches, 261,000 agents, 20 bank partners and a huge corporate agency force has enabled us to provide effective life, health and pensions solutions to consumers across the country.
Do you think that the life insurance industry is slowing down?
While the current volatility may have a short-term impact, the life insurance industry’s medium and long-term growth prospects are influenced by our economy’s strong fundamentals as well as the industry’s sound regulatory framework. The Indian life insurance industry’s growth rate may not be similar to what it clocked last year, but it remains one of the fastest growing industries in the country. During the first quarter of the current financial year, we grew over 14% as an industry, with the private sector logging a whopping 73% growth. I believe the Indian life insurance sector will continue to enjoy the status of a preferred tool for investing one’s long-term savings. In fact, the industry’s focus on safety will strengthen its position further.
How are ULIPs performing, particularly equity-linked ones?
Linked funds constitute over 88% of our total assets. We have noticed that customers prefer ULIPs. This is so because the product design and its inherent features of transparency and flexibility have gone down very well with investors. In addition to providing a convenient platform to participate in equity markets, ULIPs are designed to
encourage disciplined long-term savings. All these features have worked well with the Indian retail investors. While the month-on-month growth has seen a marginal decline, I am confident that serious investors will continue to prefer ULIPs to meet their long-term financial goals.
With the current volatility in the stock markets, do you think its time for traditional products?
We have a comprehensive product portfolio comprising both traditional and unit-linked insurance plans for our consumers. From our feedback, we understand that they seek transparency and flexibility offered by ULIPs and choose it as a preferred vehicle to invest in the equity markets and participate in the Indian growth story, over the long-term. There is no question that the long-term nature of these products enable consumers to invest in a disciplined manner.
How are your child or pension products doing?
Today, retail investors are more aware of the financial products that can fulfil their needs. An Indian investor will generally secure his childs future first before saving for himself. So, this has resulted in many takers for child insurance plans.
Pension products, on the other hand, have also been a popular investment option and have driven growth. This is true despite the fact that the younger generation does not opt for provident funds. As per data released by the Life Insurance Council, around 35% of new business premium collected in FY 2007-08 was from pension plans.
Will competition intensify in the life insurance sector with new players joining the industry?
Competition has significantly increased with the number of players increasing to 21. However, India remains under penetrated and under insured and as an industry we can provide life insurance solutions to more consumers across the country. Life insurance is a long-term product and customers in this highly competitive environment will choose a brand that will deliver over a long term and an insurer who is well capitalised.
How popular are your health products? Can you compete with non-life companies?
Over the last 18 months, ICICI Prudential Life has continued to strengthen its position as a health insurer by introducing first-of-their-kinds products based on consumer needs and providing a wider range of services to health insurance consumers. Today, we offer nine health insurance plans ranging from products to manage one’s hospitalisation expenses to managing expenses related to critical illnesses such as cancer or diabetes. The category has marked substantial growth and it will continue to remain one of our key growth drivers.
With our extensive distribution and agents network, today our health insurance products are available throughout the country. In addition to our distribution advantage, our products also guarantee long-term health insurance as compared to those offered by non-life companies.
