While the guidelines are awaited, Malay Ghosh, president and ED, Reliance Life told Sandeep Singh of The Indian Express that even as the environment remains gloomy and commitment from investors for long-term schemes is on a decline, there is optimism going ahead. Excerpts:
How optimistic are you while running a business in an economic and political environment that we have now?
Personally, I think that our country is growing at 5.5 per cent at a time when others are growing at far lower rates. So, if I have to grow my money and business I have to be in India as it is predominantly an underpenetrated market for banking, insurance, mutual funds, etc. As the country grows, incomes at the hands of people will grow and the demand for financial products will increase. So there is a clear opportunity for everyone.
What are the challenges you currently face?
At this point of time, people are not very enthusiastic about savings and savings rate as a percentage has gone down. It has something to with middle class not having too much money at hand because of inflation and uncertainties around earning. In fact, as of now a commitment for a long-term scheme is slightly less than what it was a few years ago and I would think that it will come back in the coming years.
Also, people’s needs and requirements are changing, at some point they wanted unit-linked plans and currently they are staying away from Ulips, so we have to work accordingly.
How do you think things will improve after the new guidelines come up on the issues that were highlighted by the finance ministry in October?
Product approvals are currently taking a lot of time as the process is quite interactive with several layers of approval. So once the use-and-file process is launched, the product approval process should get streamlined.
Another key area is Open Architecture Bancassurance which is long overdue and IRDA is working on it. Some agreement has been reached between government and IRDA and hopefully something workable comes out of it.
We have requested to see that banks open to at least four insurance companies of the same class, if not to all as a broker. Only then can a bank customer get a real choice in insurance products.
Does your foreign partner get worried about things not moving currently in India?
Nippon is 120 years old and have seen two world wars, they will not get unduly concerned about short-term fluctuations. Our relationship is truly collaborative and we have a continuous flow of information from both sides. We learn about not just their best practices but also the mistakes they have done, their technology innovations, products, training process, customer service, etc and we try and implement them here by adapting them to the Indian market.
So are there things that you have adopted from them?
We have taken a number of their best practices, mostly in the distribution and customer service area. One of them is a new distribution format called ‘Face to Face’, which is a replication of Nippon Life’s agency model.
Under this, we have currently employed 200 women employee advisors in seven cities. Aged between 30 and 40, these women are graduates and have undergone a training of 30 days. Their performance will not be measured on how many policies they have sold but on how many activities they have done, customers met, service requests taken up and completed and how many policies sold. Nippon Life has around 50,000 women working under this model in Japan. We have begun with 200 women but it will grow in the coming months.