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In a tete-a tete, Shivaji Dam, Managing Director, OM Kotak
Life Insurance, speaks on the company's innovative products,
future plans and marketing strategies.
OM Kotak Life Insurance is a joint venture between Kotak
Mahindra Finance Limited, a major financial services company
and Old Mutual plc, a London based life insurance company.
The company has rolled out its insurance products and has
introduced a unique feature -the Accumulation Account in its
products that can take care of any defaults in premium payments
by policyholders.
1. How different are your life insurance products from
other companies?
Insurance is viewed as an investment as well as a risk cover.
In our products we have tried to meet these two basic customer
needs. The Accumulation Account is a unique feature in our
products. This is like a customer’s personal account in which
the premiums paid are deposited, the return declared every
year is added; risk & expense charges are deducted. We realise
that sometimes the policy holder inadvertently could default
in the premium payment, in this case we have a built in feature
of Automatic Cover Maintenance that keeps the basic policy
in force as the requisite charges are deducted from the accumulation
account. No other company currently offers this facility.
Value adds or riders are options that can be added on to
the policies to tailor the product to a customer’s unique
needs.. OMKM Term cover and Permanent Disability Benefit have
features that are not present in other company products.
2. Which channels of distribution other than through agents
do you plan to adopt and how would policyholders benefit out
of it?
A distribution channel should be able to reach out to maximum
number of insurable population. The reach and easy access
to a channel member is an objective that we would like to
achieve. At present we are using Tied Agents, but are also
looking at Corporate Agents and Brokers (subject to finalisation
of regulations by IRDA).
3. Private insurers are said to be not very pleased with
the setting up of the policyholders protection fund. Why?
We have never opposed this. In fact we believe that this
fund would work in the favour of the companies as well as
policyholders. The fund would be utilized to bail out a failing
company. This would benefit the industry, as when no policyholder
loses money, the faith would be restored in the instrument.
This will only help the sector to grow.
4. In the light of the existing competition, how many
policies do you plan to sell and what are your set targets?
We feel we will be able to sell around 30,000 policies in
the first year.
5. How far will you be in a position to compete with the
monolith - the Life Insurance Corporation considering its
image, size and bonus payments?
LIC has done yeoman’s service - the number of policies have
grown from around 56 lakhs in 1956 to more than 900 lakh policies
today. Its reach is phenomenal. But we also know that at present
less than 30% of India’s insurable population is insured.
LIC was the only player in the market, with no competition.
If there is only one runner in the race, there is no one to
set your benchmarks against. There is a lot of potential in
the market for other players. A lot can be done to create
awareness in the market. Some of the initiatives that could
be taken could be in the product, means of reaching consumer
and service.
6. Do you plan to introduce innovative products? or What
type of products do you plan to introduce in the future and
when?
We plan to introduce Unit Linked Endowment Plan. This plan
would offer various investment options. One could choose a
mix of options depending on individual’s risk profile and
needs. It would also allow the policyholder to shift their
portfolios taking into account the changing needs of an individual
at different life stages.
7. How do you plan to improve customer service?
We are looking at a number of features that would help a
customer easily and conveniently access the company’s services
such as Customer claims, queries and servicing. These would
be aided by technology.
8. How many agents do you have on your role presently?
We have around 250 licensed agents at present.
9. How do you plan to capture the rural market?
Have you already tied up with NGO’s We are planning to reach
out to the rural populace in Maharashtra. We have short listed
two districts where we will try and sell our policies. As
these places would be near our head office it would help in
the servicing of policyholders and tackling any issues that
could come up.
10. How much have you invested in technology? Do you plan
to introduce online selling of policies?If so when?
We feel technology will play a major role in the running
of insurance business. IT would play a major role in Front
end as well as Backend operations. We are actively looking
at introducing IT Systems for Point Of Sales, and Customer
Relationship Management. Operations and customer service of
course would be considerably IT enabled.
Online selling of policies is at present not allowed by
the regulators. As and when the appropriate regulations are
introduced by IRDA we will explore the avenue.
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