'The next decade will see focus on quality growth'

The next decade in Indian insurance will see the industry undergo fundamental changes. While robust top-line growth has been the feature of the insurance industry thus far, the focus will shift towards quality growth and profitability. We will see greater emphasis on cost management initiatives and calibrated, profitable growth, as opposed to a singular focus on top-line growth. This balanced approach will help the industry grow in a steady manner and will be beneficial to all stakeholders. This increased cost efficiency will enable us to provide better value to customers. Ensuring longterm profitable growth will require us to concentrate on managing an optimum balance between various levers of growth and profitability. Focusing on adequate training of distributors and orienting them towards a long-term outlook will be critical in ensuring long-term persistence, which will benefit the industry and help fortify its standing.

On the distribution front, while the agency channel will undoubtedly be a driver for the industry, alternative channels such as bancassurance will gain more prominence in the next decade. The sector is also likely to witness the emergence of the online channel as a key component of the distribution strategy. Unit-linked products have found tremendous popularity with customers over the past decade and have helped power growth of the industry. However, traditional products will continue to find favour with a segment of customers and will continue to be an integral part of every insurer's product portfolio.

As we enter the next decade, a key component that will drive the next phase of growth will be the effective adoption and utilisation of technology. Technology has silently brought about a revolution in every industry. The adoption of technology in insurance has been low compared to other financial services.

We see the effective utilisation of technology as a vital component that will positively influence every aspect of our functioning, ensuring better productivity and enhanced cost efficiency. More importantly, it will enable us, as an industry, to meet the changing requirements of today's customer who is technologically savvy and prefers to use the Internet for transactions that were hitherto done offline. Technology will not only lead to capacity enhancement for distributors but also aid in delivering a significantly better customer experience. Another revolution that is silently going to come into the industry is the proposal on enabling a demat environment for insurance policies. This is a significant development for the Indian insurance industry as customers will be able to operate their policy accounts in a manner similar to those in the capital market.

In future, I feel that the industry will offer enough opportunities for growth for the existing as well as new entrants. I see the industry evolving in a manner where different insurers will emerge as specialists in either certain product categories or certain distribution channels. More importantly, those in the industry need to focus on growing the market as this will ensure a win-win situation for all concerned.

Our customers trust us with their savings and, as an industry, we need to collectively ensure that their best interests are safeguarded. The litmus test of the industry's maturity will be when our customers truly see us as partners in their financial progress. Only then will growth be meaningful, sustainable and symbiotic.

The author is Managing Director and CEO, ICICI Prudential Life Insurance