New face of insuranceThere has been a lot of debate about the opening of the insurance sector which has so far involved three key players: the multinational insurance companies, the trade unions of the government-owned insurance companies and finally the government itself. But what does the impending entry of the new insurance companies mean for the common man and what benefits will the consumer derive from this change?Look at the scenario that exists today. There is one Life Insurance Corporation (LIC) which is a monopoly and the General Insurance Corporation (GIC) which has four operating companies, all of whom are owned by the government. Monopolies, especially if they are government-owned, are not known to be kind to the consumer. In the next 18 months, we should see at least 10-15 joint venture insurance being given the licence and who will begin the operations in India.The major benefit that the consumers will derive is of choice. You will have the new companies falling over themselvesto service you. On the other hand, if you are happy with your agent, chances are that your agent will come calling on behalf of a newly-established company. If you are tired of the same old insurance products, you will now have a wide range of insurance products to choose from. These new products could be tailored to suit your individual needs.You will also find a sea-change in the way the policies will be sold. Your insurance agent will come calling armed with a laptop computer that will tell you how much insurance you should be buying given your age, income profile and other details and will provide flexible plans. Your friendly neighbourhood banker will accost you the next time you visit the branch and will try to convince you about the merits of the insurance company his bank is also now representing. If you are Internet savvy, then you could probably buy simple insurance products like motor insurance or householder insurance on your PC. The new insurance companies will be investing vast amounts intechnology and therefore they will bring an insurance policy will become as efficient and routine as getting a fixed deposit receipt from a bank or a company.If you want to lodge a claim for a burglary for example, then you would call a 24-hour call centre where a friendly voice will take down the details. Claims below a certain amount will be processed immediately. For others, the insurance company will send a surveyor who unlike the breed you have to deal with today will be armed with a digital camera through which the surveyor will send electronically the photograph of the scene of the crime to the office. Speed will be the essence and decision-making will be pushed down the lowest possible level in the insurance company to ensure that no policyholder would have to wait more than the minimum period.Do not expect lower premiums though. The tariffs will be regulated by the newly-formed IRDA who will ensure the long-term viability of the insurance sector is not harmed by undercutting of premiums. Thenew insurance companies are expected to invest sizable amounts in technology, people and training to deliver a high level of service to their policy holders. They are also expected to spend heavily on advertising to build brand awareness in the initial years. In the battle of the mind and wallet that is about to be launched among the old and new players, the only sure winner will be the consumer.The author is Managing Director (Consulting) of KPMG India Private Limited
