Home
/ Insuremagic Exclusives
Interview of Venkatesh Mysore,
Managing Director,
MetLife India Insurance
(Date: 29 July 2005)
Recently the insurance regulator has come out
with stricter guidelines for group covers. How far will
this affect your group business and particularly your recently
introduced product Apna Life that targets Apna Bazar customers?
We have always abided by the regulator’s guidelines and
our product launches adhere to the same. The recent Group
Guidelines announced by IRDA are aimed at formalizing the
group insurance administration in the industry. It also
regulates certain sales practices relating to group insurance
products. We feel that these guidelines are aimed at promoting
the orderly growth of the Institutional Business and will
in fact help us in strengthening the structure of the Apna
Life Group Policy.
The IRDA has also barred insurers from entering
into any MoU's or marketing arrangement for distributing
insurance unless the person is licensed by the regulator.
How many tie-ups do you have for group insurance? How far
will the new rules bring about a change in your business
strategies?
In the Group Business we operate though our direct sales
team and brokers. At present we have more than150 Group
Policies in India. Our policies are dictated by our own
legacy of the Institutional business which is 137 years
old. Moreover being frontrunners in this sphere in the US
where 88 of the top Fortune 500 companies are our clients,
we have a fairly good understanding of this business and
to that extent we are fully compliant with the law of the
land.
Insurers now are coming out with unit-linked products
that claim to protect the downside when the market tanks
out. How costly and risky are these products over the others
and should individuals go for these products? Do you plan
to introduce any such product?
The capital guarantee products within the ULIP markets
are slightly better than the ULIPS where the whole selling
proposition was of the upside the consumer could enjoy in
the market. With a capital guarantee the customer is assured
of at least his initial investment in case of the market
tanking.
We believe that a unique basket of products should be tailored
to fit an individual’s portfolio. While ULIPs work for some
people – we advise our customers to create a financial portfolio
which is balanced and in line with their risk profile. Moreover
the primary task of the insurance product is to provide
long term capital preservation and protection. So it is
prima facie unfair to look at it as an investment product
alone.
Met Ultimate is primarily an interest-linked product which
also acts as a bank account. It is a completely transparent
and flexible product. Moreover the account is linked to
interest rate and our conviction was that an average customer
in India relates better to interest rates than to stock
market.
How far has the FBT affected your group business?
There seems to be some slowdown on group superannuation
plans due to FBT compared. Some companies have put on hold
their superannuation plans for their employees and there
is some hearsay that some others might discontinue with
their existing scheme if this tax law does not change in
the immediate future. We are still awaiting IRDA approval
on our superannuation plan & have not really been affected
by it.
Do you have products for expats? How different
are they when compared with other company products?
Any product can be sold to expatriates of Indian origin.
However we do not have any exclusive products targeted at
the NRI population right now.
Any innovative products in the pipeline?
MetLife has recently launched 2 unit-linked policies after
completing its portfolio of traditional products. Work is
in progress on certain new products for the market. However,
we are unable to share any information at this point in
time.
What is your premium income garnered in the first
quarter?
Our premium income for the time period April- May 2005
- is Rs.100.8 Million. Incidentally, we are the fastest
growing company amongst the private players in terms of
policies sold.
What is your present market share?
Currently on a YTD basis, our market share is about 1.55%
of the Private Sector (Group business and Individual Business)
for the period April – May 2005. MetLife has grown 188 percent
over the same period last year which is much ahead of the
market which has grown by 88-130%.
Your USP?
MetLife has always promoted and evangelized a need-based
selling approach. This is because we believe that there
is no ‘one-size-fit-all’ concept and individuals have their
own unique needs. Hence only after a customers’ need is
analysed, do we suggest a solution for him. This is probably
our biggest differentiator.
Secondly, right from our inception in India, we have recognized
the fact that we were operating in a nascent market where
the understanding and relevance of insurance was marginal.
In such a scenario we designed simple yet innovative products
which typically catered to the masses and till date MetLife,
among its peers has the maximum number of non-par products
in its product portfolio.
After private insurance companies started their operations
in India, we have consistently emphasized on educating our
customers and to a large extent have succeeded in doing
so. So , it was only after a gap of three years we launched
our first market linked product was a minimum guarantee
which also doubled up as a bank account. Met Ultimate, as
this product is called, was the first such product in the
market and is also our flagship product.
In the field of service delivery, we invested heavily in
IT to take customer service to new heights.
Even though we operate out of remote places, policy issuance
is now possible even within 48 hours if it’s a non medical
case. Also, MetLife has a ‘call-out’ programme whereby customers
are contacted to understand whether the product bought is
what he/she is actually required. This also helps us determine
whether we are compliant with our sales processes.
When do you plan to break-even?
The insurance sector has a long gestation period. It can
typically take 6-8 years to break even. All our projections
at this particular stage shows that if we achieve our sales
plan and our premium revenue plan and manage our expenses
the way we are projecting it, we should be able to break
even on a statutory basis by 2009. And on the basis of that
we are tracking our plans and expect that we will fully
achieve the target by then.
Archives
| Back
| Top | Home
| |
