Of late, in a written reply to Parliament on the dwindling number of life insurance policies in the country, Minister of State for Finance, N.N. Meena said, “IRDA has informed that there has been a decline in terms of number of policies in the last three years.

The decline can be attributed to fall in the sale of (Life Insurance) policies in ULIP (Unit Linked Insurance Plan) segment, which contributed to the growth earlier and other general prevailing market conditions in the country.” Statistically speaking, in 2011-12, the number of policies dipped by 8.2% to 4.41 Crore, whereas during the first nine months of the financial year 2012-13, i.e. upto December 2012, the number of polices were down by 0.1% at 2.69 Crore.

A few weeks earlier, while delivering his budget speech on 28th Feb, 2013 the Finance Minister P. chidambaram said, “All towns in India with a population of 10,000 or more will have an office of LIC and an office of at least one public sector General Insurance Company.” He has set a deadline of March 2014 for achieving this target.

Presently, LIC has more than two thousand branches and an equal number of satellite offices in the country.

Moreover, it has a strong network of around 14 Lac individual agents besides hundreds of corporate & referral agents, brokers/ banks for soliciting Life Insurance business across the length & breadth of the country.

But, at the same time, it is also a well-known fact that despite having a mammoth organization like the LIC, which has been operating for decades under the Government umbrella, the Insurance penetration is dismally low and so is the insurance awareness & education, more particularly in Rural & Semi-Urban areas of this vast country. May be that is one of the reasons behind the idea of opening branches in smaller places which is definitely good and if implemented sincerely within the set deadline, it is going to have a visible impact on many aspects of insurance business in the country.

Undoubtedly, there has been an improvement in the Indian insurance scene after liberalization in this sector, which paved the way for entry of dozens of private players in this high potential market, but still the large insurable population, which comprises of the poor and disadvantaged section of society, though in dire need of life insurance policies, are destined to live without any cover. This issue needs to be taken care of urgently by the IRDA & the central Government to make the dream of financial inclusion a reality in the true sense.

One aspect namely mis-selling of insurance products has polluted the life insurance market during the last couple of years & hence needs to be addressed by the regulator seriously so as to instill back the confidence of potential customers.

It is heartening to learn in this regard that the new chief of IRDA (Insurance Regulatory and Development Authority), T S Vijayan has, of late, asserted by saying, ‘Certainly, addressing mis-selling and protection of policyholders’ interests is a priority.’ Some other aspects of life insurance business such as persistency ratio and servicing of orphan policies have also been a major cause of concern and so has been the death claim settlement ratio, which must be given due emphasis while monitoring and then rating the overall business performance of any insurance player in this evolving market.

A lot many initiatives at the ground level for creating awareness about the need for purchasing life insurance products based on one’s needs and financial affordability together with more enabling and customer friendly service offerings, are the urgent need of the hour, which IRDA chief has also accepted and appreciated. But, all said and done, implementation and execution has been and will be the key to success of any policy/decision.

Hopefully,the big brother in Indian life insurance space, LIC of India, would justify its famous slogan, “Yogakshemam Vahamyaham” which means ‘ Your Welfare is Our Responsibility’ in far better manner in future for others, mainly private players to emulate. Of course, IRDA is there to guide, support and monitor for ensuring a more customer friendly and inclusive life insurance scene in the country in the days to come.