Reliance Life has altered its product mix to bring down the proportion of unit-linked insurance plans (Ulips).
Last fiscal, Ulips formed around 90% of the product mix. This has fallen to around 50% in the quarter ended June, though for the full fiscal, the company expects the proportion of Ulips to be at 60%.
“The idea is to sell more non-Ulip products to lower income segment people and offer Ulips and other complex products to people with a higher income,” said Malay Ghosh, president and executive director, Reliance Life Insurance. “But we will provide the same transparency and flexibility to both income categories with the difference being only with fund management charges,” added Ghosh.
He said the 60:40 ratio between Ulip and non-Ulip products was advocated by most life insurance experts in India and abroad as against the earlier ratio of 90:10. To achieve such a balance in the product mix, the company has launched universal life products that are similar to Ulips in terms of transparency and flexibility but with the exception of fund management.
“We have trained our agents in Tier-II and Tier-III cities to offer products from both platforms — Ulip as well as non-Ulip to customers,” said Ghosh. The insurer, which crossed the 6 million mark in policy sales last month, plans to venture into the health insurance and micro-insurance segments this year.
The company had Rs 13,661 crore assets under management as of March and plans to take this figure to Rs 30,000 crore by 2012.
Also, the life insurer aims to break even by the end of the current fiscal. “We have budgeted a loss of Rs 150 crore for this year, but we are aiming to perform better than our set targets,” said Ghosh. The company managed to reduce its losses from Rs 1,085 crore in FY09 to Rs 231 crore in FY10.
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