Private insurers will usher in more traditional products

The new norms will have a positive impact on the industry in mid- or long-term. The guidelines will make Ulip products more customer-friendly and transparent. There shall be increased insurance element and products will be priced as attractive long-term solutions. We are looking at launching new Ulips according to the new norms.

With Ulips likely to get costlier,how will you be able to attract small-ticket policyholders?

Our focus is to make attractive customer propositions via new Ulips with simple-to-understand features,attractive pricing and a simple charging structure. This will appeal to a range of customers,including first-time Ulip buyers and seasoned investors. However,it is clear that the industry will now have limited capability to offer Ulips below a minimum annual premium size.

How should the industry simplify products which are becoming complex to understand?

Irda has been active in proposing norms that make products easier to understand for customers so that they can they take a more informed decision. I see this as a positive step for the long-term benefit of the industry. The new Ulip norms are also in the same direction. The industry will respond by coming out with simpler,easier-to-understand-and-invest products. In our new Ulip,to be launched soon,we have simplified our charging structure and ensured that is it easy for customers to understand and buy. For experienced long-term investors,the new Ulip will offer great value for money.

How do you plan to tap the pension product market?

Pension savings will remain an important segment for life insurers. The industry has been offering products from both Ulip and traditional platforms. I do not see the segment shrinking because of the new guidelines. However,the industry may find it limiting in its ability to offer significant equity exposure on Ulip pension products. ING Life already has an attractive product — ING Best Years — on traditional platform,offering a pension savings solution. Further,we will be developing alternate investment solutions on the Ulip platform.

Which retail products do you plan in the current fiscal?

We are looking at strengthening our product portfolio by introducing,on an average,one product every two months. These will be on both traditional and Ulip platforms. In September,we hope to launch two or three new unit-linked products. These include an interesting investment guarantee product and a single premium product,which I see becoming more important. We are also looking at an entry-level traditional product with a monthly premium of a few hundred rupees only. Also,we believe universal life products will become attractive for retail customers who can’t afford Ulips. ING Life has a balanced portfolio of traditional and Ulip products. Our current mix is 60% traditional and 40% Ulip,on APE. This is a healthy mix for our business and gives customers a good portfolio of products to choose from. Our sales force is used to selling both traditional and Ulip products,which I see as an advantage for us,as opposed to many who banked heavily on Ulip portfolio.

Will insurers look at plain-vanilla traditional plans more closely? How will customers benefit?

It is clear that private insurers will start to look at developing more traditional products again to ensure the right mix between traditional and Ulip products. In order to compete,insurers will need to come up with innovation. Our new child plan,ING Ashirvad is a unique product with four guarantees – maturity benefit,death benefit,premium waiver and death benefit for 30 years — after the product matures on the life of the child. I expect the industry will come up with more innovation on the traditional platforms.