Kathmandu. Nepali life insurance companies have been providing services for decades. However, if we look at the insurance plans introduced by life insurance companies in the market, what was there decades ago is still the same. The new companies that have opened in between have also been considered new in name only, and the insurance plans have continued the same old ones. In the Nepali insurance market, companies are classified as first generation, second generation and third generation, and if we look at the insurance plans, there is no difference between 19 and 20 when looking at the plans from the first to the third generation.
Term, advance payment, term and whole life and term life insurance. These are the insurance plans available in the Nepali insurance market. Moreover, term life insurance is only for showing off rather than selling. Nepali insurance companies are selling these 3-4 types of insurance plans to the customers as if they were ‘eaten, eaten, eaten’. Nepali companies have embraced only these insurance plans, and the rules and instructions issued by the Insurance Authority also cover only these plans. The format of business, financial, reinsurance, actuarial details that the insurance company has to submit to the authority, or the format of the agent’s commission, is issued only for these 4 types of plans. In this way, it does not seem that the regulatory body itself has envisaged that there will be other insurance plans.
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## ##Still the same old plans
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## There are many plans under life insurance in the global insurance market. Be it a universal insurance plan that allows the insured to adjust the benefits according to their needs even after the insurance is issued, or a unit-linked insurance plan with investments based on the fluctuations of the stock market, an annuity plan that allows you to save money and receive annual payments when you have a good income, or an insurance plan with a pension for old age income, these types of plans are considered indispensable in life insurance. However, such popular plans are not yet available in Nepal. In a market where such popular plans are not available, it is impossible to imagine sophisticated plans that are prepared by properly studying customer demand.
There are many reasons why new insurance plans do not enter the Nepali insurance market. An attempt has been made to discuss the main reasons below.
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## ##Ignoring customer needs
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## Nepali insurance companies still do not seem to have introduced insurance plans keeping in mind the needs of the customers. It is an old disease of Nepali insurance companies to prepare their own plans by copying other people’s plans. The insurance plans issued by the first generation companies by copying the Indian market have been issued by other generation companies by copying them. Which is still supporting the Nepali insurance market. If the Indian market is copied, then if they also copied the new plans there, would some customers here also get to taste some new flavors?
Before any product is brought to the market, it is studied in a way that addresses the customer’s demand. Which is what the company’s Research and Development department does. However, the funny thing is that most companies in Nepal do not have this department. The tendency to copy plans that others are doing well by taking information about and doing research should be considered research and development of insurance companies.
#Agent’s ‘Parrot Ratting’
## By being limited to the same 3-4 types of insurance plans for years, the knowledge of the agent is also limited to that. Insurance agents trained in the same insurance plans, sold the same plans, and provided the same training to new agents. Due to the lack of continuity in the study and training of the development of insurance plans, a situation arose where agents were unable to understand and explain even when a slightly modified insurance plan was introduced. There are examples in the market where companies tried to use something new because agents could not rise above the ease of explaining the insurance they had initially memorized, and even when they tried to use something new, they failed completely due to the agents’ non-cooperation. Even in the current situation in the Nepali insurance market, insurance agents have been like a helpless medium in selling insurance, so there is no other option than to implement a new method if the insurance agent does not want it.
Finally, due to the status quo mentality of agents who do not want to keep up to date with the development of insurance, develop insurance plans, etc., and explore the real needs of customers, rather than spreading knowledge of the same old insurance and trying new things, insurance companies do not bother to use plans in the market that have some different features than traditional insurance plans.
##Indifference of regulatory bodies
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## Regulatory bodies certainly have a special role in strengthening the insurance market. The responsibility of leading the insurance sector to the global market also lies with the regulatory bodies. However, the regulatory body that is supposed to pressure insurance companies to bring customer-centric insurance plans, on the contrary, takes months to approve the insurance company’s plan, showing a lack of regulations even when the insurance company tries to do something new. When the insurance company uses something new, the regulator, instead of showing readiness to facilitate and encourage the plan to be brought to the market, slows down the process, which in turn discourages the insurance company.
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## ##Lack of financial literacy among customers
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## No matter how you design insurance plans, they will ultimately be sold to the insured. In the context of Nepal, insurance policies are sold by agents rather than by customer demand, convincing the customer that life insurance is necessary. Thus, when the customer does not understand general insurance, there is no point in inquiring about universal, unit-linked and other sophisticated insurance and expressing their desire. Rather than trying to force customers with different needs to be put in the same basket and sell the same type of insurance, it is the responsibility of insurance companies and insurance agents to provide accurate information about insurance to the customer and offer insurance according to the customer’s needs. However, they do not seem to be paying attention to this.
To make the insurance business more attractive, all stakeholders need to think about the latest insurance plans according to the customer’s needs. If we stick to the same old grandfather’s plans, the insurance sector is bound to continue to stagnate.
