Canara HSBC Oriental Life Insurance Company Launched by P Chidambaram

News and Reviews: Noting that India is among the under-insured countries, Finance Minister P Chidambaram today said insurance products should be simple and need to reach the rural population where penetration is low, reports the Economic Times.

He was speaking after inaugurating the Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd, a partnership between two of largest nationalised banks and the Asian Insurance arm of the world’s largest banking and financial service group. It will be interesting to see, what Brand & logo will emerge for the newly formed and IRDA approved JV Insurance Comapny. Surely, they should not have such a long name for an Insurance Company.

Applauding the partnership between the three giants– Canara Bank, Oriental Bank of Commerce (OBC) and HSBC Insurance Asia Pacific Holding Ltd– he said the the new firm was the 19th life insurance firm to be launched in India and that there were “six more in the wings".

The growing numbers indicate that India had the capacity to support such a large number of companies and that there existed an “unmet demand” for insurance products in India, he said.

Observing that the insurance penetration in India had been low, he said India was among the under-insured countries.

He said insurance products also needed to reach the rural population where penetration was low.

However, as a measure of caution and advice, he said “products should be simple". “Plain vanilla is still the best flavour for an ice-cream,” he said quoting an analogy. “People in India are simple folks, who work hard and save. “I believe that simpler the product, better will be the reception”

Those selling insurance products to rural customers, should understand their language, attend to their concerns, he said while stating that products should be such that they could easily comprehend and claim benefit quickly. Death claims must be settled immediately.

News and Reviews - We 100% agree with the views of Indian Finance Minister Mr P Chidambaram. Though Insurance market in India is over USD 30.00 billion and growing at healty 25% rate PA, the per capital penetration is still way below the mark. Last estimate suggests that only about 9% of Insurable Population is covered in India. Which means both Rural as well as Urban Areas are not fully covered. Simple Products be in Life or Health or Home Insurance may be the answer for better penetration of Insurance Products in India. But, the bigger challenge is not Product but distribution and service. Since opening of Insurance sector (2001), India has seen huge growth both in terms of Insurance Companies and Intermediaries (Agents / Brokers). Competition will indeed, bring better products, better distribution (Bancassurance & Online) and better premium and that will change the Great Indian Insurance Story.