The insurance sector was liberalised and opened to private sector participation to break the monopoly position of public sector companies and provide better insurance coverage, products and services to the citizens and in the process augment flow of long-term resources for financing infrastructure.
Be it the evolution of new channels of distribution or innovative product development or the optimal use of the latest state-of-the-art technology, the central theme is the customer’s choice and his/her convenience. Competitive pricing, value for money for the customer, high service levels, upgrading the quality of agents, back office and front office staff, consumer awareness and sensitive and prompt response to the consumers’ grievances are the other features of this market which can easily be discerned.
The market seems to be expanding and growing but only in depth and not the width of coverage. Such growth rates, however, can be sustained only by reaching out to newer markets. And no concerted effort on development of new markets has been seen so far. LIC has responded well to competition, the decline in its sales figures, post 2002 have been on account of removal of its high selling single premium, guaranteed products. It has shown impressive growth in its traditional product sales.
In non-life sector, the challenge seems to be more daunting. Not only the retail market has not been impacted in any perceivable proportion, the levels of awareness and also the standards of customer services, as perceived by the general public, are pretty low. This needs to change.
There certainly has been a plethora of new and innovative products offered by both, LIC and new players, in the life sector. LIC has the widest range of products and customised solutions for the customers. Public sector non-life companies are yet to get their act together.
This is an area where new companies are clearly ramping up by bringing in their global best practices, operational efficiency through technology etc. Public sector companies are fast gearing up. However, a lot still needs to be done in this area as is evidenced by the FORTE survey. The real time response and turnaround