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De-regulation will be a boon to the Indian consumers, as there will be plethora of products and more options to choose from. It is also possible that market segmentation will be more fragmented. The competition will ensure a decrease in price levels. Banks will start to be one of the new channels in this market. The structural changes resulting from liberalisation will cause fundamental changes in the market behaviour within the insurance industry.
The strategy of maximising turnover is no longer a recipe for success. In future, companies may compete over price, products, underwriting criteria, innovative sales method and financial standing. The abolition of market barriers will permit the appearance of specialist suppliers, banks and foreign insurers, wanting to take advantage of additional entrepreneurial freedom. Poorly managed companies with a weak capital base will drop out of the market, or premium rates and profits will dwindle. The liberalisation of insurance prices will impact the transparency of the market. From the suppliers point of view, this means profit from innovation, and this can be reaped longer if the innovation is not duplicated fast.

Insurance companies globally are actually investment companies. In India, they could give mutual funds a run for their money. For the first time, it may be possible to look at insurance as a serious investment option. Some new comers in the market will offer universal life and variable life insurance products that allow the holder flexibility in deciding how his product mix is going to be split. New products will also enable product combinations that allow greater customisation.

Finally, insurance companies can take a leaf out of the customer durable companies and offer their equivalent exchange schemes. In this era of competition, no one insurance company can sulk at his or her success and maintaining the performance will be a tough task.

Concluded.

* Contributed by: -
Mrs. Reshmi Augustine is Research Scholar in Management, Sathyabama Deemed University, Chennai,
Dr. K. S. Chandrasekar is Reader at Institute of Management in Kerala, Thiruvananthpuram.

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