India’s insurance penetration has been reported at just 3.76 percent in 2019, says IRDAI. This penetration was even lower before and a lot of it is contributed to lack of awareness and help pertaining to relevant policy selection. To understand the role of insurance broking business with regards to insurance inclusion across all segments, Rashi Aditi Ghosh of Elets News Network (ENN) interacted with Sanjay Radhakrishnan, CEO and Principal Officer, Hero Insurance Broking.
1. What’s the synergy for the Hero group to enter insurance brokerage in a major way?
Well, to tell you the truth Hero has been in the insurance broking business for quite some time now. Initially when we started off, we started with a corporate agency license. The objective being, to provide customers who buy a Hero two-wheeler with multiple insurance coverage options to choose from and service them at the time of a claim. We were the first to issue policies digitally through our in-house IT platform Ensure+.
We have come a long way since then. We have created a distinctive omni-channel presence with a landmark 2,700 servicing locations through our 10,000+ dealer/channel partner network and a data intelligence of over 100 million+ customers. This is one of the biggest networks in the country. We are happy to say, that we’re one of the few insurance service providers who have extensive coverage even in the remote rural locations of India. The business has grown extensively with the acquisition of the Direct Broking and then the Composite Broking license (acquired recently) from IRDAI.
In the past year specifically, we have transformed a traditional business to a completely digital one where more than 99.9% policies issued are digitally assisted.
All our existing business lines have been digitally enabled, and we’ve introduced new lines of businesses which have a digital first approach. Be it the POS (Point of Sale) business channel or the Employee Benefits business, we have taken multiple strides to create an organization which is digitally supported and driven. What’s more, all the digital enablement platforms required to keep the business functioning smoothly are controlled and managed in-house by our technology team and some tech partners who are always ready to push the scale further ahead.
From a future plans’ perspective, we want to position ourselves as a complete solution provider for insurance and risk management products to all our clients, be it retail customers or corporate clients. This means helping fulfil all their risk management objectives through the suite of services we offer. As a part of taking forward the digitization initiative, we are planning to introduce multiple new technology initiatives. For example, enablement of QR code-based renewals for our MISP (Motor Insurance Service Provider) business/Hero360, our CRM platform and an end to end digitally set-up Employee Benefits management portal for our clients and their employees.
2. Would you like to help us understand your distribution model and how is it different from other brokers/ insurance companies?
Though insurance has multiple lines and sub-lines, to put it simply we currently operate in five major lines of business. These are the MISP, POS, Employee Benefits, Specialty and Reinsurance.
The MISP business is at the core of all these businesses as that is where the Hero roots lie. It is an entirely retail business dependant on a network of highly experienced automobile dealers and service providers providing customers with ready to sell, over the counter motor insurance policies.
On the other hand, the POS business tries to offer a wide array of small and medium sized insurance solutions covering the complete range of general and life insurance, which are affordable and easy to understand. Because we reach over 2,700 locations these are then distributed through an ever-increasing network of people spread across the country, known as a network of POSPs or Point of Sale People.
Another major channel for us is the Employee Benefits channel which has been launched recently. This business focuses on providing large and customized insurance products for catering to the requirements of our clients and their employees. This channel covers group health, group term life and personal accident products and is powered by a comprehensive industry leading digital platform of Hero Insurance Broking, termed HeroCare.
And last but not the least, Specialty and Reinsurance are the two other businesses. The focus currently is on hiring the right talent and creating the right partnerships. We foresee these business lines to become major contributors to the organization in the future.
These five major lines of businesses enable us to service our clients, be it retail or institutional, from a complete 360-degree perspective covering every aspect of their insurance and risk management requirements.
3. What are you plans to navigate their business?
Our observations show that most brokers and insurance companies target the top 50 – 100 cities of the country, thus creating a sense of high competition in the industry while most of the country remains untouched. As we move geographically to tier 3, 4, 5 and 6 locations and eventually the rural areas, the competition reduces drastically.
Along with providing our services to the top 20 cities of the country, our prime focus would be to make use of business channels like POS and MISP to reach out to the smaller markets like tier 3 – 6 cities and rural areas to cater to their insurance needs as well. Insurance can immensely benefit the people here and provide them with the necessary financial support. As these areas form majority of the country, we see untapped potential in these markets which we intend to harness. This will be done through the process of enabling the people on the ground, like POS agents and channel partners, through strategic digital interventions which can help them to do business from anywhere and at any time.
We are uniquely positioned, as we anyway service more than 2,700 locations, even in the interiors of the country.
4. What are your revenue targets for next 2-3 years?
We currently have tieups with 2 major OEMs i.e:
• Hero Motocorp, &
We plan to increase these partnerships with the advanced level discussions which we’re currently having with multiple other 4-wheeler private car manufacturers. Having over 2,700 service locations in our kitty, the size and scale at which we operate in will give us an edge allowing us to manage our new partnerships with ease.
We have our own OEM enablement technology platform which allows us to generate more than 20,000 policies per day and upto 5,00,000 policies in a month.
5. How will technology play a crucial role in the business strategy especially when targeting semi-urban/ rural areas where internet penetration is low?
As per our and the government’s studies, though overall broadband penetration in the semi-urban and rural areas are low, mobile and data penetration is comparatively high with every other person in the rural areas having a data enabled phone.
We are leveraging state of the art technologies like our digital policy issuance and management platforms, remote training and certification platforms and online customer and channel partner service portal, among others which enable the POSPs in these smaller regions to do business digitally and thus creating a phygital approach to insurance selling in the semi-urban and rural areas.
6. What kind of digital initiatives have you introduced lately?
We have been in this business for the last 15 years and have insured almost 100 million customers. We believe that this data is invaluable, and our retail business lines are reaching out to these customers digitally and the results have been getting are extremely encouraging. All this is possible due to the analytics cell that we have created. Our analytics capabilities are helping in creating a customer persona which helps us in identifying the needs of the customer. Since we have presence in over 2,700 locations, the combination of data and geographical presence which Hero Insurance Broking has created is one of its kind in the industry.
Most companies think from an ‘inside out’ view, where they focus mostly on how to make data flow internally in an easier manner. However, we have prioritized our channel partners and customers and designed a ‘two-way’ flow. In other words, we’ve incorporated an ‘outside in’ view (via feedback/discussions) which is at the heart of tech solutions that we have setup.
For the enablement of our channel partners, we have setup multiple tech solutions which prioritize the needs of the channel partners and customers. One such initiative is the Renewals Management CRM created for our MISP channel, termed Hero360. The solution provides a bird’s eye view of the customer’s journey in the entire renewal life cycle to the channel partners. It has state of the art features like minimized probability of data leakages, completely digitized process flows, automated tele-calling processes connected to the application and much more. This has in some locations increased renewals three-fold.
Another key initiative is the digital policy issuance and management portal created for our POS channel. The portal allows POSPs and customers alike to compare, fulfill proposal and purchase a policy almost instantly. The portal is equipped to enable POSPs in the remotest locations to suggest to customers the right insurance solution as per the customer’s requirements and issue a policy. Our technology team has also created a mobile app of the portal for the further enablement of the POSPs, to ensure all partners are able to access the portal, from any device at any time and from anywhere.
We have also taken steps to introduce digital interventions for a new-gen Employee Benefits platform, termed HeroCare. The platform acts as a comprehensive solution which can help manage Employee Benefits with ease for all stakeholders, with an aim of cost reduction for clients, ease of digital journey and playing an advisory role. We have also leveraged our ‘Digital Incubation Center’ to drive big data analytics for enhancing products, distribution model and customer retention strategies. We have created these capabilities with small in-house investments, and now intend to develop a super platform called “Hero One” which shall connect all our digital platforms into one.