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The company is ready to meet the needs of the dynamic Indian, says Rahul Sinha

How has been the insurance penetration in India? Where do you see it a few years down the line?

The penetration of the insurance industry has increased. From 1.6% of GDP, the penetration has risen to 3% of GDP. Also, the reach in terms of life covered per year has grown around 20-30% per annum since opening up. We see the penetration of GDP to rise to about 5% in the next five years.

How do you plan to further strengthen your retail business operations? Kotak Life Insurance is expanding rapidly and is very confident of expanding beyond its present 100 branches in 60 cities. We believe geographical expansion is the first axis of our retail business growth. We aspire to cover the top 200 cities in the next three to five years and we plan to touch about 150 branches by the end of this year itself.

The second axis of our retail business is the distributor/advisor expansion. Along with our geographical expansion, we are aggressively growing our distributor base and our Life Advisor base. This expansion aspires to double our distribution this year.

The third axis is the product constructs in markets. Kotak Life has increased its product variety by launching a child focused unit linked (Headstart), a reversionary bonus whole life product (Eternal Life) and a retirement product (still to be launched) in the span of the last 12 months. We believe this will allow us to reach more markets, grasp more customers through more distribution strength.

Can you elaborate on your rural strategy? What proportion does rural business account for in Kotak Life Insurance? Selling insurance in rural and semi-urban areas (population below 50,000) is a lot different in terms of need for education, advising and consultation. Also the product basket requirements are different and therefore a lot of things do change in these markets. Kotak Life Insurance has followed a strategy of choosing the right product for the right consumer through the right channel always. Our product –Surakshit Jeevan is a product, we sell exclusively in this market. Also our other products do sell as consumers of other nature (those whose requirements look like the urban customers) also exist in these markets. We are able to meet our rural business obligation very comfortably in each of the previous years and are sure to do so this year too.

A host of banks and others have evinced keen interest in setting up insurance ventures. Do you think this will lead to overcrowding? No. I think the insurance industry has enough space for competitive play today. In fact, chances are, more competition will lead to more growth and refined business practices in future.

What kind of precautions Kotak Life Insurance is taking to ensure sound business practices? This industry has it own sets of risks and risk control measures. Like all prudent management teams, we have taken due diligent measures to ensure sound business practice.

Which innovative products do you plan to come out with in the future? We plan to introduce a set of products to meet needs and growth opportunities. However, would like you to know about them as we are in readiness to share more.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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