Pramerica Life’s growth strategy is centred on expanding distribution channels, deepening partnerships, and serving underserved segments like rural communities and defence personnel, shared Pankaj Gupta, Managing Director & Chief Executive Officer, Pramerica Life Insurance in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).
Can you elaborate on the transformative growth strategy behind “Pramerica
2.0” and how it shapes the company’s future?idly evolving financial hub like Dubai?
Pramerica 2.0 represents a pivotal phase in our evolution, characterised by a strategic focus on sustainable growth and operational excellence, ensuring that our growth strategy is well-rounded and aligns with our long-term vision for value creation. At the heart of this transformation is the following approach:
- Prudent Approach: We’ve adopted a prudent approach, managing risks smartly and emphasising sustainability in every action we take. Our goal is to build a resilient and long-lasting business that prioritises value creation over short-term top-line focus.
- Distribution Expansion: Our distribution expansion strategy focuses on broadening our reach through multiple channels while maintaining leadership in key segments.
- Maintaining Market Share in affinity channels: We continue to excel in the niche affinity channel by insuring 1 in 6 soldiers* of Indian Armed forces. (*in terms of servicing the army jawaans)
- Continued focus on growing Group business through our Micro Finance Institution Partnerships: New Business Premium from Micro Finance Institution (MFI) partnerships grew by 109% YoY in FY24, covering 43.85 lakh new rural lives in FY24.
- Building proprietary Retail distribution: Investing for scale of agency channel while maintaining profitability. With a strong agent base of 15000 in FY24; plans to increase the strength by 1000 more agents in FY25.
- Scaling third-party distribution: Third-party distribution, covering Broking, Corporate Agency, Web Aggregation and Bancassurance, remains the fastest route to achieving retail distribution scale. We are investing in expert capability for acquiring and servicing distribution partners and making sustained efforts to build this line of business.
- We currently have one Small Finance Bank & one Payments Bank as our Banca partners and are pursuing discussions with other Cooperative banks and Regional Rural Banks (RRBs) to explore synergies and deepen our presence.
- Setting Up New Distribution Channels: Making early investments in setting up Direct distribution models, online as well as feet-on-street, which we are focusing on testing and scaling in FY25 and beyond.
- Enhanced Capabilities: We are continuously investing in capabilities across functions including Customer Onboarding, Distributor Enablement, and Employee Upskilling to increase competitiveness and ease of doing business.
How are Pramerica’s customer- centric programs evolving to meet policyholders’ changing needs, particularly in digital innovations and personalised services?
Insurance is not just a product; it’s a promise. One guiding principle remains at the core of our company: a steadfast commitment to customer- centricity. Our mission is to ensure that every decision we make, every product we design,
- Our Claims Paid Ratio is 99.06 % for FY24 and is amongst the Top 10 in the industry.
- Claims Guarantee Initiative Pratigya Kavach: A customer-centric program to ensure hassle-free claim settlement within 3 days. We are seeing positive responses to this program with 9 out of 10 qualified claims being settled within 3 days.
- Transforming claims processing through the adoption of Tele-investigation, claim documents verification (QR code scanner, online verification, profile screening via Credit Information Bureau (India) Limited (CIBIL) and Insurance Information Bureau of India (IIB) checks). This has led to an improvement in claims settlement turnaround time for individual policies by 25% (from 4 days in FY23 to ~3 days in FY24
- Self-service portals (customer portal and claims status tracker) to enhance accessibility for customers and Improve overall user experience.
- Insta Issuance of policy with the adoption of digital tools (e-KYC, E-NACH, Video PIVC & Digital Payments) for onboarding of customers.
- Building CX capabilities in-house with a focus on enhancing our customer proposition in a competitive landscape.
Pramerica has a leading market share of over 50% in the defence segment. What do you attribute this success to, and how do you plan to maintain or grow this leadership in the future?
It has been our honour to provide financial solutions to those who protect our nation and we take great pride in the trust that has been placed in us. We have been serving this segment since 2009 through our flagship channel ‘PRAHRI’. The mission is to provide Life Insurance cover to the armed forces personnel against all types of risks attributable to military service including war and warlike situations. Our other channel, PARAM was launched in 2015 to provide Life Insurance cover to Central Armed and Paramilitary Forces (CAPF) personnel from all types of risks attributable to service.
We take immense pride in stating that we protect 1 out of 6 soldiers of the Indian Army today and have successfully protected more than 3 Lakh defence personnel through our life insurance products. To ensure seamless service, we are present across India with 137 branches, manned by trained workforce of around 576 veterans among other professionals and more than 8000 veterans have been trained and employed since inception.
Several key factors have contributed to this leadership:
- Dedicated Claims Initiative for serving Indian Army personnel, ensuring quick claim settlements, with turnaround times ranging from 45 minutes to 4 days upon receipt of complete documents.
- Customised financial solutions and products like Rakshak Smart, are specifically designed for defence personnel and their families to cover unique risks such as conventional war, low-intensity conflict, disaster management, and internal security duties.
- Strong workforce representation from the defence community, with over 8000 veterans trained and employed under the Prahri and Param initiatives, which helps Pramerica Life understand and address the unique needs of soldiers and their families.
- Extensive community engagement programs, including partnerships with the Army Wives Welfare Association (AWWA) and other defence organisations, strengthen relationships with the armed forces and their families.
- We have ongoing collaboration with various departments of the Indian Armed Forces and aim to further solidify our presence in the segment
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- Swabhimaan is our initiative to provide a new identity and an exciting career opportunity to soldier’s wives through which we provide extra financial support to the family.
- Launch of an initiative for the Veer Naaris; our prime focus will be to support, strengthen and empower the women dependents of physical casualties and their next of kin.
◆ Job opportunities at the company
◆ Vocational training for widows/ dependents
◆ Educational support for dependents
◆ Financial & Medical support
◆ Legal Advisory
We hold our country’s armed forces in the highest regard and consider it a privilege to serve those who serve our nation.
Since their inception in 2009, how have the Prahri and Param initiatives evolved, and what key milestones have they achieved along the way?
Since their inception, the Prahri and Param initiatives have significantly evolved in terms of scale, reach and impact. Prahri, launched in 2009, started with a single branch in Jalandhar and has since expanded to cover over 3.18 lakh lives (As on Mar 24) across 137 branches across India. Key milestones include:
- 2010: First 100 lives covered.
- 2013: Participation in welfare programs and over 25,000 lives covered.
- 2016: Over 1,00,000 lives covered and the launch of a dedicated claims program.
- 2020: Over 2,25,000 lives covered and 767 death claims settled.
- 2024: More than 3.18 lakh lives are covered, with 1869 death claims disbursed.
The Param initiative, launched in 2015, extends specialised insurance services to Central Armed Police Forces (CAPF) and paramilitary forces, further broadening Pramerica Life’s defence portfolio. Both initiatives are supported by a workforce of veterans and cater to the specialised needs of defence personnel and their families.
Can you share more details about welfare initiatives like the VEER NAARI program and the role partnerships with organisations such as AWWA and Asha Schools play in your community efforts?
Pramerica Life Insurance, through its Prahri initiative, is also involved in various community welfare efforts, particularly focused on supporting soldiers’ families, war widows (Veer Naris), and differently-abled children. Some of our ‘Close to heart’ initiatives which are aligned with the focus of the Indian Armed Forces include welfare activities like career counselling, training and financial awareness sessions. We are associated with ASHA schools offering vocational aids and pre-vocational training to differently-abled children
Through Veer Naari, our prime focus will be to support, strengthen and empower the women dependents of physical casualties and their next of kin.
Our community efforts have been recognised through awards such as the Pride of the Nation Award, which acknowledges the community engagement programmes for the well-being of society and for supporting the cause of war heroes, which Pramerica Life Insurance has been running successfully in collaboration with the Indian Army.
What key strategies drive Pramerica Life’s expansion and innovation in India’s highly competitive insurance sector, and how do you see the company positioning itself over the next few years?
Pramerica Life’s growth strategy is centered on expanding distribution channels, deepening partnerships, and serving underserved segments like rural communities and defence personnel. We are already on a high growth trajectory growing our New Business Premium at 18% YoY YTD Aug’24 vs 11% of the private life insurance industry in the same period.
Our focus on building individual businesses is clearly reflected in our YTD Aug’24 Individual New Business Premium growth of 52% YoY, which is 2.5 times faster than the private industry.
Our approach is deliberate, ensuring sustainable growth aligned with our long-term vision. Our strategy is anchored in two key principles:
- Sustainability and Profitability: We focus on maintaining a balance between rapid growth and long-term viability. This involves sustainable business practices that ensure profitability without compromising quality. By concentrating on essential metrics like persistence and claim settlement, we ensure our growth is both swift and stable.
- Commitment to Quality: Quality is a cornerstone of our approach. Our Claims paid Ratio of 99.06% for FY24 reflects our dedication to upholding customer trust and delivering on our promises. Quality is about building lasting relationships with our customers, and this commitment is evident in every aspect of our operations.
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Over the next five years, Pramerica Life aims to establish itself among India’s top 10 life insurers and grow at a 30% CAGR in New Business Premiums. To achieve this, we are implementing a strategic growth plan focused on expanding our market footprint, driving innovation and enhancing our distribution capabilities. Our approach involves leveraging technology, optimising operational efficiencies, and maintaining a strong commitment to customer satisfaction. By aligning our resources with these goals and staying agile in response to industry changes, we are well-positioned to navigate the evolving insurance landscape and secure our place among the industry’s leaders.
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