Calcutta, May 23: Life and non-life insurers should explore the possibilities of offering integrated products to customers, a senior official of the Insurance Regulatory and Development Authority (IRDA) has said.

D.V.S. Ramesh, deputy director (life) at the IRDA, wrote in a journal: “When other businesses in the financial sector are offering integrated products as value additions, there is a reason to explore the same within the insurance sector.”

According to Ramesh, life and non-life insurers in India have not tried to leverage each other’s strengths to come out with a combo plan. Only a limited personal accident coverage is offered in group life term policies.

Regulatory hurdles and a lack of interest among companies to collaborate have discouraged the launch of such integrated schemes.

In December, the regulator allowed companies to offer “Health plus Life Combo Product” — a policy that would provide life cover along with health insurance.

According to the IRDA, life and non-life insurance companies will have to enter into agreements to offer the health-cum-life cover. “It is envisaged that the proposed product class will enhance the penetration of the insurance business with a wider product choice to policyholders,” the regulator said while issuing the guidelines.

But no insurers have come out with such a scheme.

“The combo products will help to increase the penetration of health insurance in the country,” said S.B. Mathur, general secretary of the Life Insurance Council.

“The respective business verticals of life and non-life insurance are independent of each other and play only a complementing role. Hence, the idea of product integration is praiseworthy,” Ramesh said.

With the development of low-cost distribution channels such as bancassurance, the scope as well as the popularity of such new products are better.

However, it is learnt that differences have cropped up among insurers over the issue of agency commission. Life insurance agents get a higher commission than those in the non-life insurance. Life insurance agents also get trail commission as the policies are long-term in nature; there’s no such surety in non-life insurance as the products can be renewed every year. A couple of years ago, life insurers showed similar short-sightedness when they stopped selling group term insurance products to mutual funds at the directive of the Life Insurance Council. Companies feared that if mutual funds provided life insurance, they would lose the Ulip (unit-linked insurance plan) business to them.