With the sale of insurance policies (especially market-linked policies) slowing down and lapsation of policies on the rise, the life insurance industry is wrestling with a whole new set of challenges. Nitin Chopra, chief executive officer, Bharti AXA Life Insurance Company spoke to Suneeti Ahuja about how his company plans to tackle these issues.

•What are the challenges for the life insurance industry in this current slowdown?

The rate at which the industry was growing earlier has fallen. A whole lot of investments were made in distribution and in alternative distribution channels. Now market growth has flattened on account of customer sentiment. Everyone is therefore delaying their breakeven targets. The problem is accentuated by agent productivity coming off. And obviously lapsation rate is on the rise.

•How do you plan to cope with these issues?

Our business is strongly based on profitable growth — whether it was 2007 when the market was doing well or now. One of the important points in our plan is to form a strong distribution network. We have a high-quality agent force of 30,000 agents. At present, our agent productivity is at least 30-40 per cent better than the industry average.

Besides, we have developed other robust alternative channels of business as well. Apart from the direct sales force, we have 197 branches and make sure they contribute to our business. Although, as is the case with the entire industry, the branches are not profitable yet, we have just developed a model to make them profitable soon.

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