'We'll decide whether or not to go public soon'
In an interview with Hindustan Times Metlife managing director Rajesh Relan said the new guidelines will not affect the company's business plans as it was not dependent too much on unit linked insurance products.business Updated: Nov 26, 2010 21:59 IST
With the insurance industry going through a transformation after a string of new norms were introduced by Insurance Regulatory and Development Authority (IRDA), the focus is now shifting back on traditional products. In an interview with Hindustan Times Metlife managing director Rajesh Relan said the new guidelines will not affect the company's business plans as it was not dependent too much on unit linked insurance products (ULIPs). Excerpts:
This is the first time that you have registered profit. The going has not been easy for the life insurance industry this year with the IRDA coming up with stringent ULIP guidelines. How did you manage it?
It has been a continuous approach. We have been working towards this since 2006 and we have managed to consistently cut out losses every year. We have been looking at reducing out expenses through a sharp focus on our strategies while redesigning our operating models. We have managed our product mix well. Unlike a few companies, we were not too much dependent on ULIP, we have been focusing on traditional products as much and that has helped us.
IRDA is expected to come up with the IPO guidelines soon. Would you be looking at hitting the market?
We will wait for the guidelines to be issued. At this point, I cannot say until the guidelines are out and we examine them. Depending on the guidelines, we would decide whether or not to go public.
Several life insurance companies have resorted to downsizing. Do you have any such plans?
No, we have no plans to reduce employee strength. We have 5,800 employees and 48,000 agents at present.
What is the impact of new ULIP regulations on MetLife India profitability?
The new ULIP guidelines have resulted in fresh capital requirement across the industry. Although we have submitted our business plan with zero capital infusion starting year 2011, we will have to revisit this assumption upon acquiring a major distribution relationship.
What is your distribution strategy?
We have adopted a strong multi-channel distribution approach to target our customers. We are present in all traditional and new age distribution channels to ensure we meet our business goals and are present at all customer touch points. As much as 40% of our total business comes from bancassurance. We will continue to add more partners and financial advisors as this is an intrinsic part of our business.