One of the fastest moving and high growth categories of insurance plans, unit linked insurance policies (Ulips), which account for 32% of new life business in India, will see a host of changes in a month’s time.
KOLKATA: One of the fastest moving and high growth categories of insurance plans, unit linked insurance policies (Ulips), which account for 32% of new life business in India, will see a host of changes in a month’s time. Almost all life insurance companies, including ICICI Prudential Life, Birla Sun Life, Bajaj Allianz, Kotak Mahindra and others, are working on product design, pricing parameters, systems and training modules related to Ulips.
Tuning in to the new guidelines of the Insurance Regulatory and Development Authority (Irda), all life insurers have to bring about a compulsory 3-year lock in period, simplicity and proper insurance documentation across all linked insurance products by June 30, 2006.
With the deadline round the corner, DNA Money spoke to a number of top life insurance companies to get a feel on the changes being brought about in Ulips that contribute over 80% of the new business premiums for many.
“At present, majority of our portfolio comprises Ulips. We recently launched LifeLink Super - the first product in the market, which is compliant with the revised Irda guidelines. Modifications in other products will also be carried out in a phased manner before July,” Sujit Ganguli, head marketing, ICICI Prudential Life Insurance, said.
Kotak Mahindra Old Mutual Life Insurance, whose share of premium from Ulips was 85% in 2005-06, is currently working on bringing in various modifications across its products.
“This provides an opportunity to review our products. Incidentally most of our products aimed at the mass affluent and affluent segments are long-term in nature,” Pradnyesh Kothare, marketing manager, Kotak Mahindra Old Mutual Life, said.
Birla SunLife has over 95% of its new business premiums from Ulips alone.
“We have set up a multi-functional team to ensure complete adherence to the guidelines. We will have to modify 7-8 of our products in terms of design, addition of some features and re-price some products. This will also mean alterations to our processes and systems where we have made substantial headway. Many of our products have already been revamped and filed with the Irda,” a Birla SunLife official said.
Bajaj Allianz sells almost 65-70% of Ulips. “Most of our new products are more or less in line with the new guidelines except for a few minor changes. For the rest of the Ulips, the necessary changes are being made and the products will be filed with the Irda,” according to a Bajaj Allianz official.
Makeover time
Companies will have to introduce a compulsory 3-year lock-in period for all Ulips
Ulips contribute over 80% of the new business premiums for many companies
Product modifications will not impact growth as long as capital markets remain bullish
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