Om Mutual Planning Unit-Linked Product

OM Mutual, a joint venture between the UK-based Old Mutual and Kotak Mahindra Finance Ltd, plans to introduce newer schemes like unit-linked insurance plan and pension funds to get a better share of the market.

OM Kotak managing director Shivaji Dam told Business Standard that the joint venture had set a target of selling around 30,000 policies in its first fiscal. It has so far sold around 750 policies with the highest policy being Rs 20 lakh.

Dam said the joint venture will aim at hiring better quality insurance agents and also plans to increase the remuneration of insurance agents. "They don't get well paid and hence there is a high attrition rate of about 50 per cent among the insurance agents," he said.

 

He said, on an average, an insurance agent sells two policies a month with the average size of each being around Rs 2,000. "We want to make agents richer and expect them to sell at least around Rs 10,000 worth of policies each month," he said.

Dam said the company is targetting graduates, students and even those who have taken VRS from banks and other institutions as insurance agents. "As of now we have around 250 agents and nearly 80 per cent of them are full-time agents," he said.

Dam said, in the life insurance segment, they have endowment, money back and single premium schemes. The endowment policy features an accumulation account, which on maturity, the customer will receive the sum assured and bonus addition. The premium which the customer pays are deposited in a personal accumulation account.

The expenses and risk cover charges are deducted while the company invests the balance of the accumulation account in various financial instruments. The company will annually declare a return on the balance in the accumulation account based on investment performance.

The OM insurance bond is a one-time premium and it also acts as a fixed deposit that doubles the investment on maturity. The money-back plan not only covers life but also provides the customer with a guaranteed cash payment of a part of the sum assured every five years.