Banks need to ensure that insurance products are not mis-sold to customers and that premiums remain affordable to help boost market penetration, according to Financial Services Secretary M Nagaraju. Speaking at an event announcing partnerships between Central Bank of India and Generali Group, he emphasized that insurance is a sensitive financial product that must be clearly explained to customers before purchase.
Often, customers are explained one product but end up buying another, a practice that undermines trust in the financial system. Both the Insurance Regulatory and Development Authority of India (IRDAI) and the Finance Ministry have repeatedly warned banks and insurers against mis-selling policies, which can harm customers and deter them from renewing their premiums.
Nagaraju pointed out that high premiums discourage people from purchasing insurance, urging companies to keep costs reasonable. He stressed that insurers must honor policy commitments to maintain customer trust, as any deviation could lead to a breach of faith. “Insurance companies will survive only when people have trust,” he said.
Another critical aspect Nagaraju highlighted was claim processing. He called on insurers to handle claims fairly and promptly to avoid unnecessary hassle for customers. “Please ensure that claims submitted are honored and processed timely,” he said.
Central Bank of India’s MD & CEO, M V Rao, later told reporters that the bank does not incentivize its staff to push insurance sales, reducing the likelihood of mis-selling. The bank has recently acquired significant stakes in Future Generali India Insurance Company and Future Generali India Life Insurance Company, finalizing strategic agreements with Generali Group.
This partnership aims to enhance insurance penetration in India by combining Central Bank’s extensive distribution network with Generali’s global expertise. The collaboration seeks to offer innovative products that align with the Indian market’s needs, supporting the government’s goal of achieving ‘Insurance for All’ by 2047.
Central Bank of India, established in 1911, operates over 4,500 branches and 20,000 touchpoints across the country. Generali, a global insurance leader with a presence in more than 50 countries, is known for customer-centric solutions. This joint venture is expected to strengthen financial inclusion and provide tailored insurance options to a broader audience.