In this episode of The Core Report, Govindraj Ethiraj interviews Asit Rat, MD & CEO of Aviva India, about the persistent insurance gap facing Indian families. They discuss why life insurance penetration remains low despite high claim settlement ratios, the evolution of products like ULIPs, and the critical need for better consumer education and trust-building in the industry.
Summarized by Podsumo
Asit Rat reveals that the average life insurance claim paid by Aviva is only ₹15 lakh, highlighting a severe underinsurance gap even among customers in top cities.
The transcript explains how ULIPs (Unit Linked Insurance Plans) were mis-sold as short-term investments during the market boom, leading to customer disillusionment when markets crashed.
Health insurance is easier to sell than life insurance because it is more tangible; life insurance requires distributors to convince customers of their own financial value to their families.
Aviva is leveraging digital tools, including a wellness app that tracks steps, to engage younger customers and promote healthy habits alongside insurance products.
The discussion underscores that retirement planning is a growing concern, especially as AI and increased longevity make post-retirement years longer and more uncertain.
"The claim ratio of the industry is at 98%, so you don't have a situation where a lot of customers come and say, 'You never paid me a claim.' — Asit Rat"
"The younger customers... are not only not saving in life insurance, they're actually not saving anywhere. Money is going in malls, in buying a better watch, better phone. — Asit Rat"
"We have to move towards more consultative selling. The regulatory oversight on how to curb mis-selling is good news because ultimately it will increase trust. — Asit Rat"