The Telegraph
Saturday , March 1 , 2014
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Aviva Life faces twin hurdles

T.R. Ramachandran in Calcutta on Friday. A Telegraph picture

Calcutta, Feb. 28: A combination of regulatory changes and weak macroeconomic condition could take a toll on the first year premium collection of Aviva Life Insurance for 2013-14.

The insurer expects first-year premium collection to decline around 5 per cent to Rs 600-700 crore by the end of the fiscal. Renewal premiums from existing policyholders are expected to remain flat at around Rs 1,200 crore.

“The biggest factor was the necessity to tweak the product mix and the various regulatory changes, which meant re-tooling and re-training of various distribution channels,” CEO and managing director T.R. Ramachandran said today.

The Insurance Regulatory and Development Authority (IRDA) has introduced new guidelines for the life insurance industry with effect from January this year.

“Also we cannot altogether be oblivious to the changes in the economy,” Ramachandran said, adding that high interest rates and inflation have dented the savings potential of individuals. He, however, said that Aviva was expecting to perform better in the final quarter, usually a strong period for insurance companies.

“Most of our policy sales take place in March. Hopefully, this will be a good time as the market settles down and new products see traction,” he said, adding that the insurer is planning to recruit more agents and focus on child plans.