Digital Leap in Rural India : Bridging the Insurance Gap

The majority of India resides in the rural segments. Further, it has been stated that the need for insurance is the strongest in the rural mass market segment, which is largely underpenetrated by most financial institutions. There has been a marked improvement in the accessibility to various financial solutions due to the adoption of digital-driven by Covid and government schemes, shared Casparus Kromhout, Managing Director & Chief Executive Officer of Shriram Life Insurance, in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).

Shriram Life Insurance has come a long way since its inception. Can you walk us through the company’s journey, highlighting key milestones in market presence, product innovation, and business growth?

Shriram Life – founded on the principles of the Shriram Group of financial inclusion – started predominately in South India. The company has expanded to other geographies over the last 18 years. The company now has branches across over 22 states and customers from over 30 states. Further, Shriram Life is now the 7th amongst all private players in the industry in terms of the number of new business individual policies sold. Further, the company has one of the lowest tickets for individual new business non-single premium policies sold at approXimately Rs. 20,000. The company has had some ups and downs in growth along with the Industry, especially during the pandemic, but has developed a strong growth momentum and service to its customers.

Shriram Life’s key differentiator has been that the company has always worked to extend financial security to all segments of the community, especially to the more vulnerable segments of society in rural areas.

We’ve heard about your focus on tier 2 and tier 3 cities. What unique approaches is Shriram Life taking to expand in these areas? Can you share any success stories or challenges you’ve encountered?

Over 40% of Shriram Life’s new business policies are sourced from designated rural segments of the country, making Shriram Life as one of the only insurers with a strong focus on the rural segment. Considering the same, Shriram Life has been unique in that all its efforts are centred on developing processes and solutions that specifically cater to the reach and needs of this customer segment. These include the development of new customer solutions like small ticket size products tailored for its segments, customer onboarding applications with eKYC with facial recognition for hassle-free customer onboarding and quick digital means of customer solutions. The company has also developed a digital claims settlement mechanism and processes that enable claim settlement for all non-investigated cases within 12 hours of the last document received. This has been a huge relief for our customers’ families, especially in the deep rural segments, which receive the needed financial relief when it is most needed. Over 90% of all our non-investigated claims are settled through this rapid claim settlement process even in the remotest of rural locations.

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In today’s digital age, how is Shriram Life leveraging technology to enhance customer experience? What consumer- friendly innovations have you introduced recently?

Shriram Life has amplified its tech capabilities to meet its growing customer base. The company has been on the forefront of adopting various innovative tech solutions. Shriram Life’s focus on using digital technologies is to develop solutions that make an impact to its customer base and solve for specific needs for the customer.

Initiatives such as the issuance of Shriram Smart Suraksha Card, policy bond in a ‘pocket’, is one such example that helps customers have an easy-to-store solution to the policy bond and access various services like renewal payment. ShriMithra app is a customer-facing service application that offers one of the highest number of services in the industry, chatbot ShriA and WhatsApp service channels provide enhanced customer service in the language of choice. Shriram Life is licensed to use Aadhaar eKYC with facial recognition for hassle-free and paperless customer onboarding through its mobile application ASTRA. This service has enabled approXimately 90% of the paperless proposals across channels.

Rural insurance awareness is often a challenge. What initiatives has Shriram Life undertaken to educate these communities about insurance? How effective have these efforts been?

The majority of India resides in the rural segments. Further, it has been stated that the need for insurance is the strongest in the rural mass market segment, which is largely
underpenetrated by most financial institutions. There has been a marked improvement in the accessibility to various financial solutions due to the adoption of digital-driven by Covid
and government schemes. There has been an improvement in the awareness of life insurance as well, but largely, we still have customers where we need to explain the need for life insurance and continued cover. Shriram Life has tried to reach these customers through various channels and avenues. The company has a dedicated channel focused on spreading awareness and life protection in the deep rural segment. Further, the company has been looking towards partnerships with other institutions that are already present in this segment.

Congratulations on the recent bonus declaration of Rs 201 crore, a 35% year-on-year increase. What drove this impressive growth, and what does it say about Shriram Life’s financial health?

The steady growth in the payment of bonuses underscores many factors for Shriram Life.
It is an indication that we have grown not only on new business policies but also in our individual book size. As of March 31st 2024, Shriram Life sold around 4,46,730 policies compared to 2,90,156 policies in the year-ago period.

The company also had an increase in its individual book size to 11.8 lakh policies. It reflects on the strong fundamentals of the company, which include factors like customer retention, apt customer solutions to cater to customers’ needs and sound investment performance.

Also Read | How life insurance sector will shape-up during FY24 – Challenges and opportunities: Casparus J H Kromhout, Shriram Life Insurance

Looking ahead, what are your top priorities for Shriram Life Insurance over the next five years? Can you outline some key strategies you plan to implement to drive growth?

Shriram Life would continue to focus on its key customer segment; the focus would continue to provide financial security to the more vulnerable segments of society. The company would also maintain the current growth momentum with a focus on increasing sales capacity, expanding to newer geographies, and reaching new customers through different business models and innovative customer solutions.