‘Life insurance is a solicitation business…..’ well no comments!
Now Hari Narayan wants the agency channel to close down and only the bancassurance business to survive. Completely from my portfolio point of view, I am very happy. Banks are in a great position to know what you do with your money – and they have software which tells them that regularly. Banks spend a lot of money on seeing what the consumer does. Of course the business friendly (over friendly) regulator RBI knows this and does nothing. Obviously.
When the regulator is in such a nice relationship with the regulated entities, what should you expect?
So banks will sell life insurance. As long as the banks are allowed to set up subsidiaries which can create life insurance policies – the money remains within the group, vow what an incestual relationship. Soon banks will be allowed to sell multiple life insurance policies!
At least a couple of CXOs regularly tell me ‘Subra….we are attempting to reduce the dependence on the banking channel’. One owner said – it was because it was the ego of the MD of the insurance company – he was being treated like a school boy by the bank (obvious?).
Is it good for the customer of the insurance company? Well I do not have too much respect for people who are willing to write Rs. 10 L cheques because they THINK their wives need a ‘big’ locker in a high premium residential location! Or for the SME businessman who is willing to sign a Rs. 50L cheque to hasten the disbursal of a Rs. 38 crore term loan!
However the NRI who is sailing or is a carpenter in Dubai saddled with a Rs. 50,000 per month premium for a product where the bank has 54% commission is a little cruel is it not? Well I am not complaining – I said in the first para I am a shareholder of banks, not mutual funds, life insurance companies or brokerage houses. For my banks these are just tools to earn money. Long live banking! And the banking regulator. See how he regulates savings bank interest. L O L.
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