As technology and digitization is revamping businesses across the insurance industry, it is now more crucial for insurers to put their focus on servicing customers digitally while also adding a personal touch to win their confidence. Companies are switching to a ‘digital-first’ approach by deploying chat bots as well as investing in AI/ML to optimise customer servicing digitally. Despite the challenges, we continue to remain positive about reclaiming the lost time and fulfil the various objectives that we’ve set out for ourselves as an organization, said Ashwin B, Chief Operating Officer,Exide Life Insurance, in conversation with Elets News Network (ENN).
1. Industries across the world are facing challenges due to Covid-19. How did the Insurance sector change?
There is no denying that 2020 was an extraordinary year for individuals as well as businesses. During the initial months, many businesses grappled with adapting to the new working model and ensuring business continuity, and it was no different for the insurance sector. With the onset of the pandemic, the insurance sector reported a contraction in New Business growth between March and June 2020. The uncertainty and unpredictability over income and cash flows pushed customers to postpone their financial decisions. In addition, the extended periods of lockdown restricted customer visits to branch as well as physical engagement with advisors.
There are two key aspects where the dynamics have changed considerably. From the consumers’ perspective, the awareness for life insurance has gone up significantly. Customers are now seeing life insurance as an essential spend and are proactively looking for protection-oriented solutions. Digital adoption by customers has also gone up and more people are now comfortable with researching and purchasing products digitally.
The Insurers on their part have increased focus on digital/remote selling to sustain the top line. More and more companies are now making disproportionate investments in their digital assets and infrastructure to enable virtual selling and ensure seamless remote/digital servicing of customers.
These fundamental changes will play a big role in transforming the life insurance landscape in the country, over the coming years. Companies who are agile and adapt to the changing times will find themselves outperforming across various business metrics.
2. Is insurance now a demand-driven product? Do you feel people do not perceive it as a pushed product anymore?
Insurance in general and Life insurance, in particular,has often been perceived as unavoidable spend where the benefits will only accrue on the death of the policyholder.As a society we are generally optimistic and therefore, 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.
With the onset of the pandemic,a larger section of the population has come to realize how uncertain life is, and as a result there is considerable change in the perception towards insurance. Over the last one year, people’s outlook towards financial planning and insurance, in particular, has started to evolve and Insurance now holds great potential to emerge as a cornerstone in one’s financial portfolio. Today, customers are more mindful about securing the financial future of their loved ones, which has resulted in an industry-wide rise in demand for term plans. The pandemic has enabled more customers to look at insurance as a necessity especially for protection, which we believe will help in making Insurance as more of a pull product as awareness goes up over the years to come.
3. What emerging trends and technologies are you witnessing across the industry?
The Insurance industry has embraced the new normal by taking necessary measures and investing in the right areas. Certain trends are here to stay and are expected to leave a lasting impact on how insurers operate going forward.
Enhanced user experience:Insurers are adopting a digital-first approach, where customers have the power to access products and avail various services from the comfort of their homes. Also, so far, life insurers have predominantly relied on advisors/sales personnel to take their products to the market, which has necessitated equipping the front line sales staff with the right set of tools and technology to enable remote selling. At Exide Life, we have digitized the sales process end-to-end, to make it easy for our customers to buy,as well as for our advisors/ sales staff to sell.
Wide range of solutions: In view of the growing awareness among customers, insurersare coming up with truly novel and customised solutions to meet various financial goals.For example, our recent product Exide Guaranteed Wealth Plus was launched keeping in mind the financial objectives of our customers along different life stages. We have ensured that the product is able to provide higher returnsas compared to other competitive products, while providing life cover and offering tax benefits, among other benefits.
Enabling Self-Service: More and more insurers are enabling policy-servicing request on-the-go, with an aim to improve customer satisfaction and reduce the turnaround time. Insurers are investing in technology and using data to develop tools that will help customers avail various services with little or nohelp from a customer service executive. For instance, developing a robust online payment portal has played a crucial role in enabling premium collection during extended period of lockdowns, in turn helping us service our customers effectively and ensuring business growth.
4. How has customer acquisition and servicing transformed lately? What initiatives are you taking to streamline your offerings?
Since the onset of the pandemic, there has been a higher dependency on digital tools, which required insurers to enhance their IT infrastructure. At Exide Life, for the last 3-4 years we have focused largely on enhancing our digital ecosystem which helped us in being better prepared for the change brought in by Covid-19.
In terms of customer acquisition, we have created a digital platform (e-sales) and were amongst the first in the insurance industry to adopt the mobile-first approach for our sales teams. We have digitized the entire process which empowers our advisors/sales personnel to continue selling virtually. As a result, we are able to onboard a new customer digitally -from the initial meeting with a potential customer over a video or phone call, right up to the time the policy bond goes in for printing. At an organizational level, over 95% of our new proposals are now logged in through this digital platform.
Adopting the best-in-class technology and investing in tools that can improve our customer servicing further, especially the claims process, has been another key focus area. We understand the emotional and financial hardships that the nominees may face after the loss of the policyholder and therefore, we ensure that all death claims are processed on priority. Our individual Claims Settlement Ratio is one of the best in the industry at 98.54% in FY 20-21 which is a reflection of our efforts put towards settling claims expeditiously in a hassle free manner.
5. How Digitization is helping with easing customer service?
Life insurance as an industry has always been about identifying customers’ needs, discussing the various plans basis their financial goals, and thereafter converting to proposals.The industry has largely relied on in-person meetings where a personal touch helps in taking conversations forward.However, given the pandemic, customers have now resorted to digital platforms where they have the power to browse through multiple plans sitting in the comfort of their homes. They are able to learn about new products and compare various plans before deciding on what they want to purchase.
As technology and digitization is revamping businesses in the insurance industry, it has become more crucial for insurers to focus on servicing customers digitally while also adding a personal touch to win their confidence. Companies are switching to a ‘digital-first’ approach by deploying chat bots as well as investing in AI/ML to optimise customer servicing digitally. Over the medium to long term, this will help in making customer servicing more efficient and will also help control costs for the insurers.
6. What are your plans for the rest of 2021? Are you facing any challenges post the second wave?
As an organisation, our performance in the last year has been promising. After reporting nine successive years of profit, we are geared up for accelerated growth in FY21-22. Factors such as a superior product mix, strong presence in untapped markets, presence in tier II and III areas, efficient fund management, and performance-driven proprietary distribution channels, will continue to help us sustain our profitability and maintain our growth momentum in the coming years.
We have continued to strengthen our portfolio of participating products, and have declared policyholder bonuses every year since 2002, which makes for a compelling proposition for customers, while also strengthening our commitment of “LambaSaath, Bharose Ki Baat”. There is an increased focus on catering to the higher-income customer segments. As an extension of this, we recently launched an attractive non-participating product – the Exide Life Guaranteed Wealth Plus – an ideal investment product that is independent of market and interest rate volatilities. We will continue to innovate and meet the changing financial needs of our customer with new solutions across categories – protection, savings and ULIPs.
When it comes to distribution, we have been investing constantly to grow and increase productivity across our proprietary distribution channels – Agency and Direct channel. Both these channels will continue to play a key role in driving our business growth.
Additionally, we have remained prudent and managed our expenses efficiently, while also making the right investment choices cross business operations. This will continue to help us provide superior financial solutions and services to our customers as well as advisors. All along, we’ve stayed committed to building a purpose-led and agile organization,which we believe will boost our growth in the coming years.
When it comes to challenges, the second wave has impacted New Business growth of most insurers and we experienced a slowdown too. We, however, continue to remain positive about reclaiming the lost time and fulfil the various objective that we’ve set out for ourselves as an organization.Insurers are also seeing a surge in the volume of death claims, especially on account of the second wave of Covid-19. As the pace of vaccination improves further and infections continue to be on a downward trend, we expect this to stabilize as well.