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Straight from the Specialists

Taking stock of the insurance sector

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

With half the financial year gone by, it’s time to take stock of the insurance sector. Let me start with life insurance.

It was a tough year as new norms for a majority of insurance products – which were to be effective Oct. 1, 2013 but later postponed to Jan. 1, 2014 – were hanging like a sword over the business.

The new rules are meant to make policies friendlier for customers and it would have been a disaster if consumers had delayed purchasing policies till the new regulations kicked in. But fortunately, it has not played out too badly for the industry.

To be sure, some companies have taken major hits, but quite a few others have done better compared to last year, led by a stellar performance from Life Insurance Corporation of India (LIC).

New ways to distribute insurance policies

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(Any opinions expressed here are those of the author and not of Reuters)

On a rainy day in Mumbai, I was chatting with the taxi driver. It was a prolonged journey, made worse by a never-ending traffic jam. We talked about insurance and I asked him about his insurance cover. I heard the familiar story of a man being cheated into buying an expensive plan; he escaped only after losing a lot of money.

When we think of insurance, it’s typically life, motor and health insurance that come to mind. These are relatively expensive and an already reluctant Indian consumer stays away unless forced into it. This ‘push’ component has become the default sales mode. Motor insurance is mandatory by law and should have ready acceptance. But a large number of vehicles on Indian roads are still not insured.

Can someone force an insurance product on you?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Often, you may think you are getting a great deal on an insurance product. Chances are you might not have given this much thought.

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