Change is inevitable and specially when a black swan event like Covid-19 pandemic occurs, transformation across industries and all sections of life becomes a necessity, for survival and continuity. Insurance industry is one such sector that showed phenomenal amount of growth and innovation during the uncertain time and from once being called as a pushed product, it became a demand driven entity. To understand, what strategies helped the sector remain in the game and match the drastically changing customer requirements, Rashi Aditi Ghosh of Elets News Network (ENN) interacted with Rahul Agarwal, Chief Distribution Officer, Exide Life Insurance.
Excepts of the interview:
1. How evolved is the insurance industry post the pandemic? What growth opportunities are you witnessing lately?
With uncertainty around health and finance during the pandemic, individuals were quick to realise the importance of financial planning and the role insurance plays in it. The demand for life insurance hence saw a steady rise where more individuals started buying term plans to safeguard their dependents against unforeseen scenarios.
Customers today look for better life insurance products, personalized options, innovative products and flexibility in payments. As a result, insurers are creating products that cater to the evolving needs of the target audience with a digital first approach. The preferred methods of buying insurance have changed too where there is not only the sale of insurance digitally, but a hassle free mechanism of interacting with the agents and advisors on digital platforms.
2. Would you like to tell us about your distribution network? What are Exide Life’s core competencies in this gamut?
Insurers have been quick to adopt a hybrid model where digital tools are enhancing the traditional selling process to strengthen the overall customer servicing mechanism. The industry realised the importance of digitization early on and invested heavily to ensure the pandemic did not obstruct the business as usual. Use of virtual meeting platforms and mobile apps for advisors helped in the process.
At Exide Life, our largest distribution channel – Tied agency, along with the Direct channel account for ~70% of our overall business pie. We were well prepared with our digital infrastructure for business continuity even before the lockdown was imposed. For instance, our e-sales app was launched around three years back. We launched online training modules for our sales teams to help them understand the steps to conduct business while working remotely. All these efforts enabled the Agency and Direct channel in conducting business and meeting their targets. So far, the teams are using our digital tools to the fullest, while ensuring quality of business. We have a strong network of over 40,000+ advisors and physical presence in close to 200 cities across the country.
Adding to this, we have declared policyholder bonuses every year since 2002, which makes for a compelling proposition for our customers. Our sales teams leverage this strength to bring in more business. We have designed products that cater to a wide range of customers including HNIs. We are striving towards improving our product mix further across categories. Our Claims Settlement Ratio is among the best in the industry at 98.54% which reflects our efforts towards settling claims expeditiously in a hassle free manner.
3. How did you level up your services digitally in a bid to ensure continuity? What are your views on digital selling space?
At Exide Life, we have digitized the entire sales process end-to-end to make it easy for our sales staff and customers. We invested in technology, which helped customers avail services with little or no help from a customer service executive. For instance, developing a robust online payment portal helped us enable premium collection during extended period of lockdowns, thus helping us service our customers effectively and ensure business growth. With digital disruption in the business landscape, I believe there is a huge need to align the right product to the right customers.
We adopted a mobile-first approach for our sales teams created a digital platform – e-sales. Today, over 95% of our new proposals are now logged in through it. This step enabled sales personnel and advisors to continue selling products virtually and this helped us acquire more customers digitally. We were the first in the industry to take such a step. This has further improved transparency and efficiency starting from the login all the way to the issuance phase. We expect this to also help us control costs in the long term.
4. What level of change in customer’s perception to insurance are you witnessing?
Life insurance is typically perceived as an unavoidable spend where the benefits will only accrue on the death of the policyholder. As an optimistic society we often avoid thinking and preparing for the worst-case scenario. This probably explains why life insurance has so far been a push product rather than a demand-driven product.
In the last two years, there has been an evolution in the customer perspective. A large section of the society has come to realise the uncertainty of life and there has been a considerable change in the perception where individuals have started realising its importance in financial planning. Customers are more mindful about protecting the financial future of their loved ones, which has led to an industry wide rise in demand for term plans. Insurance is now viewed as a necessity for financial protection for loved ones, which will help in making it more of a pull product.
5. In your view, which trends will shape the future of Insurance industry in next few years?
The need for life insurance increased significantly during the pandemic given the uncertainties of life. Protection solutions, particularly life insurance, have become an essential requirement in personal financial planning. Here are some key trends in the insurance industry which we expect in the coming years:
Protection
Term plans will continue to see an increased demand as the need for basic protection becomes an essential priority. Life insurers will concentrate their efforts on increasing customer concerns such as income fulfilment and other goal-linked requirements like retirement.
Digital Technologies
Life insurers will continue to invest in digital technologies to help customers purchase complex products in a simple and hassle free manner. Efficient on boarding of customers digitally will be a key expectation from customers. Insurers will focus on making improvements to the customer journey through adopting AI, ML such as AI enabled chat bots in order to make it a seamless experience.
Easing access to insurance
Companies will look for newer strategic partnerships to smoothen the life insurance journey for customers. The sector will continue building new multi-channel partnerships to assist and provide information to customers.
Strengthening of the insurance advisory approach
As there is an increasing demand for life insurance, insures will strengthen their insurance advisory approach. Understanding customer needs and advising them on appropriate solutions to address challenges will become the norm. Digital tools will help in providing a certain degree of personalisation to help customers identify and fulfil their unique needs.
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