In general, insurance as a topic is very unlikely to come up during informal

coffee break discussions in any office. However, being into this industry, I often
become part of such discussions. An instance like that came up yesterday in my
office pantry. But the sizzling coffee mugs revealed some interesting dimensions
of state of life insurance in India. I will not say that these aspects were new but
interestingly they made the discussion holistic. Rare occasion to see, where
tempting aroma of hot coffee beans can make, generally insipid topic like
insurance, little exiting.
I was sharing that whenever I utter the word insurance in front of anyone
in general, I can clearly see signs of scepticism right on the face. Sometime they
get expressed and sometimes implicitly articulated. To be frank, that is not the
reaction I look forward to, about the industry I am associated with. But it is a cold
fact! Off course it has reasons, whether we like it or not.
Anyone called up by an insurance agent or by a telesales guy. Cynicism
begins! How come so much of mistrust? If I do not like or do not want someones
product or services, I can always say no. A friend of mine told that the impression
of mis-selling has got ingrained. But what an irony! In India, on an average, the
educated fraternity who buys life insurance is more qualified than an insurance
agent. So how come they are taken for a ride and then left to crib and curse.
Doesnt that indicate an important dimension of the issue? Lack of Financial
Illiteracy! One is not able to decide and qualify need of financials products and
services. How many of us look up to insurance as a risk mitigation tool? Do we all
ensure that we are adequately protected, before we look to other aspects of
investments and returns? A frank introspection would answer no to these
questions, for most of us. Things need to be looked beyond 80C or 80D limits.
But how come mis-selling is not an issue in banking or other financial
counterparts. At least the impression is not as prevalent as that of insurance misselling. Another friend pointed out the training that the customer facing layer
gets in banking. It is far more comprehensive and continuous, as compared to
what agents and intermediaries get in Insurance sector. What stops an insurer in
investing for a groomed sales force? Someone then added another aspect of
qualification. And an analogy came that was bit disturbing. The fixed portion of
the remuneration for any agent is almost at par with what a driver gets! Even
most of the agents are engaged part time only. That being true, the onus of misselling should shift away from the agent. Who is determining the qualification

and training need for these foot soldiers? Or who is working for the sense of
belongingness and sense of career accomplishment for these agents?
Then let us talk of the regulations. In its short span of existence (one and
half decade), insurance regulator, has relatively been more in news than any
other regulator. From almost being dormant prior to 2008 to super aggressive
afterwards, the insurance regulator has made lot of news. Be it for its tussle with
SEBI on unit link products or be it related to open architecture affecting the
bancassurance players. I personally, appreciate the pro customer image that
IRDA has built through its concerted efforts over last few years. But one of my
colleague had a view that the regulator is being so harsh on such a nascent
industry. There is a point. Any free market competition, works for the wellbeing of
all stakeholders, only when the players have attain a level of maturity. Indian
insurers too, have a right for more balanced approach of the regulator, so
that they attain required maturity to face and survive the sharpness of free
market economy. The insurance regulator has a long way to go to be at par with
its matured counterparts like banking regulator.
But what about the Insurers? They have the largest stake here. Would not
they be doing the most to make things fine. Rather than curative, they need to
adopt preventive approach. Some of the companies seem to working on their
public image and focussing on issues of trust, transparency as well as need
based selling. But a concerted effort as an industry is still lacking. It would be
great to see how these players prepare themselves to

embrace the

regulators pro customer reforms into their business strategy.

It was good to thread across the systemic issue and it was good to sense
that things are manageable. The coffee session was over and it was time to look
back into our screens.