We want to educate customers to hedge across insurance: Vighnesh Shahane

Q&A with CEO, IDBI Federal Life Insurance

Private life insurance company IDBI Federal Life is looking to launch products across segments in this fiscal including group, online and unit-linked insurance (Ulip) space. In an interview with M Saraswathy, Vighnesh Shahane, CEO, IDBI Federal Life Insurance talks about this strategy and way forward. Excerpts:-

Overall, in FY16 the company saw a positive growth in premiums. How was the overall performance?

We had 16% growth in total premiums which includes renewals and individual new business premium was up by 40%. We had a good top-line at a time when the environment was challenging. Further, our performance with respect to persistency has also been good. Similarly, the complaints ratio is one of the lowest among private insurers and complaints resolutions time has also reduced considerably from eight days to five days. Overall, it has been a strong year for us and the focus is on customer centricity.

Since there is a cap on number of products that can be filed, what would be your focus areas?

There is now a five products per year cap from the regulator. We have identified a couple of products on the group platform, an online product, a Ulip product and a participating product. The focus is to have products across platforms so that even customers can have an array of products. We are also telling our sales force to educate customers to hedge across insurance like they do for investments.

Profits were down in FY16 compared to FY15. What was the reason for this?

This was because we decided to fortify our reserves. Whatever profit we show is clean profits and we want to build up our long term embedded value. We do not rely on surrender profits and profits were down since we strengthened our reserves.

The regulator has opened up the bancassurance channel. Are you in talks to tie-up with other banks? 

We have a regular business development activity and talk to banks. However as of now, insurance is not a core product for banks and the focus is currently not on insurance. 

Do you see this as a threat since your banks are also allowed to tie-up with other insurers.

But we also get to tie-up with other banks. I see opening up as an opportunity. Though I am not a proponent of open architecture, but if it happens, it is welcome as it will help us to reach out to all the banks. 

Your foreign partner is yet to hike their stake in the insurance venture. Are the talks on?

Yes, currently the shareholders are in talks. The intent is to step up their stake.

Are you looking to grow up your Ulip business further?

We have a balanced product portfolio at this point and what we sell is based on capabilities of sales team and understanding of our customers. Majority of our customers come through our banks and the understanding of Ulip products among our customer base is not very high. Unless we are sure that the customers can understand and sales force can sell it effectively, we will not do it. It cannot happen  at the cost of customer satisfaction.