There were 776 products offered by life insurers in India, at 31 March 2018, with 587 individual products and 189 group products made available, according to data from the IRDAI.
Of the individual products, 557 individual products were marketed by the 23 privately held life insurers while 30 were from the sole state-owned giant, Life Insurance Corporation of India (LIC).
Merely adding new products to the portfolio to stack up the numbers may not result in actual sales, however. Industry sources told Moneycontrol that even though insurers have 20 products each on average for individual customers, only three or four of them bring in the lion's share of sales.
The data also show that insurance companies tend to have multiple products in one category.
While the regulator has discouraged insurers from filing too many products and limited the number to five a year, existing products in themselves provide an array of options to the customer. The pertinent question that each insurance company could reflect on could be about what differentiation they could offer in their products that would attract customers to buy.
Considering India’s huge population and limited insurance penetration, a small set of simple products with easy-to-understand features is the need of the hour. These needs should also be addressed by insurers.