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Minister urges state insurance firms to go in for strategic alliances in co-operative sector

The Union Minister of State for Finance Balasaheb Vikhe Patil today asked the state-owned insurance firms -- LIC and GIC -- to go in for strategic alliances with co-operative organisations for the purpose of spreading the insurance cult in the rural economy.

Inaugurating the two-day International Conference on Insurance in India, Patil observed that there was an urgent need for the existing insurance companies to innovate and design new insurance products for general and life insurance to enhance the growth of the industry.

In light of the emerging benefits that the rural sector would be getting in the next five years from the expansion of informational technology, this is imperative, he said.

The co-operative sector in India, particularly in Maharashtra and Gujarat, could significantly contribute to the growth and spread of insurance business if innovative products at reasonable cost are launched and distributed through the network of co-operative organisations, he said.

All these products should include the rural artisans and the migrant labour and the petty self employed people who are backbone of our rural economy.

Initially, the minister said, it would be possible to go for franchising vast majority of insurance products through a single co-operative organisation or a group of co-operative firms for creating awareness and opportunities of insurance business among the masses.

Patil, who is in-charge of the insurance portfolio at the Union Finance ministry, said that the innovation and distribution of products for the rural markets and individuals need application of best management techniques of the insurance players.

This, he said, calls for dedicated market research and understanding of rural psyche.

In this context, he felt that the Insurance Institute of India should generate thought-inputs towards maximising returns on investments in the friendly environment already existing in India.

This implies tremendous amount of change in the level of competency and attitude of people engaged in insurance profession. The minister also emphasised the pivotal role of the Insurance Regulatory Authority, or IRA, to guide the industry in a friendly manner.

Besides protecting the interest of the consumers, he said that it would be necessary for the regulator to treat the insurance and re-insurance companies as their customers whose interests unless protected, would not result in achievement of success in the development of the insurance business in liberalised environment.

The expectations from the opening up of the market is not only to provide insurance cover to the millions of countrymen, but also to the growth of the industry which would lead to increased competition and greater reach propelled by more number of players in the insurance industry.

The new areas of Indian insurance firms in future would be health care management, pension management, risk management, underwriting and claims management which will receive tremendous boost in the years to come, Patil added.

UNI

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