Where a life insurance product is actually decided

Most of our savings business is non-participating, with maturity and income benefits fixed when the policy is sold, alongside participating plans whose bonuses depend on the fund's experience and unit-linked plans whose value moves with markets. Each makes a different promise, and the customer usually reads only one number in the illustration. I own how those promises are structured and shown. Since 2025 our illustrations have opened with what a customer would receive on surrender at the end of years two, three and five, ahead of the maturity figure. I work with the Appointed Actuary on the return each product offers at maturity and on early exit, and I insist that we compare both with bank deposit rates for the same term, because that is the comparison our bank customers actually make. The surrender-value changes of 2024 made this more urgent, but the principle is older: a savings plan should be fair to the person who leaves early as well as the one who stays.

Term insurance is the simplest product we sell and the hardest to sell well. Its economics depend almost entirely on who is underwritten and how, so I treat the underwriting journey as part of the product rather than a hurdle placed in front of it. With our chief underwriter and the reinsurers who carry much of our mortality risk, I set non-medical limits, decide when a nurse's tele-medical interview is needed, choose what evidence of income we accept and design the cover we offer when a proposal cannot be accepted as applied for. Because section 45 of the Insurance Act limits an insurer's right to question a policy once three years have passed, any question we fail to ask at issue tends to resurface as a dispute with a bereaved family. I would rather spend ₹1,450 more per policy on a nurse's call than repudiate a claim for non-disclosure. Our plan for GST-registered traders carried the same thinking to customers whose income has to be read from returns and bank statements.

Sixty-one per cent of our new business arrives through banks, and 49 per cent through Varunashree Bank, our promoter. That concentration shapes my whole job. A branch sells to customers who trust the bank, often during a visit about something else, and a relationship manager's incentive can outweigh a product's suitability. So I build eligibility into the sales journey itself: age and income limits on long-pay savings plans, an affordability check, and a recorded pre-issuance verification call in the customer's language that asks whether they understand what they have bought. Commission arrangements with our promoter are related-party transactions that need our Audit Committee's approval, and I have written those papers with independent benchmarks attached. Each quarter I report persistency and complaints by bank, region and branch cluster to the board's policyholder protection committee, so that a problem in one bank's branches becomes visible before it becomes a pattern.

A lapse in the second year destroys most of the value a life policy was expected to create, because acquisition costs have already been paid and the future margins vanish. I therefore treat persistency as a product measure and track it by cohort, product, channel, premium relative to declared income, customer age and even the week of the quarter in which the policy was sold. Those cuts have changed decisions. They showed that older bank customers on long-pay savings plans lapsed at nearly twice the company rate, that traders paying once a year lapsed far more than those whose premium dates matched their trading cycle, and that business written in a quarter's final fortnight held up worse than the rest. Thirteenth-month persistency has risen from 78.4 to 85.2 per cent since 2021–22, and 61st-month persistency from 49.0 to 58.6 per cent. I distrust a single company-wide ratio, because it averages healthy business with business that is quietly failing.

Most working Indians are self-employed and will never draw an employer pension, and longer lives make retirement income one of the most useful products a life insurer can offer. It is also among the riskiest. An immediate annuity fixes a payment for life on the day it is sold; a deferred annuity fixes it years before the payments begin. I launched our annuity range in 2018 and now oversee a book that wrote ₹1,150 crore of single premium in 2025–26. With our chief investment officer and chief risk officer I decide how much long-dated rate risk each design carries and how it is hedged, including through the interest-rate derivatives that insurers are permitted to use for hedging. I have turned down designs that offered attractive rates by assuming reinvestment yields we could not lock in. The deferred annuity now before our board raises that question again, and I would rather bring it slowly than price it hopefully.

Most of our products now reach the market after approval inside the company, under a board-approved product policy, rather than after a long exchange with the regulator, which moves the burden of scrutiny onto us. I chair the management product committee that carries it. Every proposal reaches the committee with a named customer group, the channels allowed to sell it, an eligibility rule, the year-two and year-five surrender values, the expected persistency by channel and the distributor's commission. The Appointed Actuary certifies pricing, compliance confirms the filing, and the chief risk officer comments on guarantees before anything launches. Withdrawal gets the same discipline. Since 2021 we have closed nine retail products, taking the range from 31 to 22, and every remaining product carries a named owner who presents its persistency and complaints to the committee each year. A product nobody is prepared to defend in that room should not be on a branch shelf.