The life insurance industry in India will continue growing, but the growth will have to come from the mass market comprising people earning Rs 3 lakh to Rs 5 lakh per annum, Rajesh Relan, Managing Director of Metlife India Insurance Company, told HT in an interview. Excerpts...
On growth of the life insurance industry this year
The growth will be 10 -15 per cent in the next five years. However, the challenge will be where the growth comes from. The mass market, which consists of 30 crore people earning between Rs 3 lakh to Rs 5 lakh per annum, is mostly under- penetrated. Insurance products will have to be tailor made for this segment and most of the expansion will have to be in this segment.
On consolidation in the sector
The industry is beginning to feel the tremors of consolidation due to external factors such as the foreign promoters of domestic insurance companies facing trouble. An internal factor that can drive consolidation is if the expenses of Indian insurers are high, leading to higher losses and delayed break-even. This would warrant further infusion of capital, which may not be available.
On Axis Bank not renewing the contract to sell Metlife’s policies
There are some deals you can match and some you can’t. Axis bank was contributing 30 per cent to our top-line but in a dynamic industry such as ours, the players have to be ready to manage such eventualities.
On the way forward
In order to save ourselves from taking a hit due to the Axis Bank loss, we are increasing our branch network from 195 as on December 2009 to 285 by June 30, 2010, which is a 50 per cent increase in our distribution network. This will increase our presence from 142 cities to 238 cities. We are strengthening our existing distribution channels and are also now acquiring new distribution partners like corporate agents and brokers to compensate for the loss.
On the way forward
In order to save ourselves from taking a hit due to the Axis Bank loss, we are increasing our branch network from 195 as on December 2009 to 285 by June 30, 2010, which is a 50 per cent increase in our distribution network. This will increase our presence from 142 cities to 238 cities. We are strengthening our existing distribution channels and are also now acquiring new distribution partners like corporate agents and brokers to compensate for the loss.