Expert Zone

Straight from the Specialists

Slow death for push marketing of insurance?

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

Just five of the 23 life insurance companies in India (I have excluded Edelweiss Tokio as they are new entrants) could increase their premium collection in 2011-2012 over the previous year. In fact, none of the top 10 premium collectors of 2010-2011 could increase their sales in 2011-2012. Why so?

It’s strange to put a disclaimer in the middle of an article, but here I must — lower premium collections or sales do not necessarily mean lower profitability. In fact, some insurance companies might have increased their profitability in spite of lower sales and it could even be a conscious strategy.

Mind you, all this is when India is considered an under-insured, under-penetrated life insurance market. So where does the problem really lie? The common reason associated with the drop is the change in regulations and maybe even the pace of change. Frankly, all the regulatory changes in the life insurance sector in the last year have been pro-consumer — the sooner they get implemented, the better it is for the customer. Commissions paid to intermediaries for some products came under the scanner and were reduced and rightly so. And then we saw a large dip in the interest levels of intermediaries to sell those products. Should a product sell only because an intermediary makes a lot of money out of it?

Tax breaks only if insurance cover is 10 times annual premium

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

Tax exemption under Section 80C is one of the major drivers of insurance sales. In fact, it has become a trend to launch a new variant of single-premium plans in February-March to cater to those who just want to make some investment to avail tax benefits.

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.

Lack of retirement planning options

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

Unlike people in developed nations such as the U.S. and Europe, people in India are known for their conservative habit of saving. The need for regular income after retirement is a concern that haunts most Indians.

No mad rush for life insurance IPOs

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

Last week, the regulator finally released the long-awaited draft for insurance companies to raise capital through an Initial Public Offer (IPO). As soon as this announcement was made, the entire industry was caught in a frenzy trying to decipher every word.

Insurance industry players go online — reluctantly

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

From the year 2000 onwards, the Indian insurance industry saw a number of private players entering through the gates thrown open by the government. Public sector player LIC had already gained an edge by being a pioneer in the life insurance space. With an army of agents, LIC was way ahead of these latecomers and found itself settled comfortably.

Five things to do before you turn 30 — financially

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

1) Start investing in Mutual Funds
There is a reason why I mention this as the first point in the article. Mutual funds are by far the best starting tool for any investor. And this holds true for any type of investor — extremely aggressive ones and those who do not know much about investments.

The tough part of managing the portfolio is best left to the experienced funds managers who have adequate resources and the knowledge to best maintain the returns on their funds portfolio and manage the associate risks. They are far better informed than an individual can expect to be in most cases.

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