A senior figure at
India’s insurance regulatory and development authority (IRDA) has
said that life insurance product innovation is not necessarily the
driver for winning long-term customer loyalty.
This was the personal
view expressed by Devarakonda Ramesh, deputy director (Life) at the
IRDA, in the May 2012 edition the IRDA Journal
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Ramesh said: “Though it
is a natural demand for innovation to meet the changing needs; an
insurance product may only need steady, but incremental
improvements.”
According to Ramesh,
except in the case of regulatory or statutory change, there is no
need for a “radical short term opportunistic” innovation regarding
life insurance products.
Ramesh added:
“Innovation may also prove fatal, if other markets/instruments
underlying an innovative product do not develop/mature
simultaneously.
“The basic tenets of an
informed choice to a customer are complete only when a reasonable
portion of a given product’s prospective policyholders understand
the functioning or the latent intricacies of it.”
Ramesh also argued that
the impact of a product on a company can significantly affect brand
visibility.
“A product that
withstands the tests of the time may turnaround the brand of the
company. On the lines of Xerox becoming a generic name, there could
be similar cases in insurance in future, if targeted,” said
Ramesh.
