Life insurance sector in India set to grow 12-15% over next 3-5 yrs

Life insurance sector in India is "expected to increase by 12-15 per cent annually over the next three to five years. Operating models of insurance companies will be reshaped in the future – the rigid organizations with manual processes will turn into digitally enabled, agile, flexible workplaces that leverage the power of data and analytics which will further enhance customer experience and create more business value," says Sanjay Tiwari, Chief Strategy Officer, Exide Life Insurance, in an exclusive interview with Bizz Buzz

At Exide Life, we have adopted a digital-first approach where our customers have the convenience to avail our services from the comfort of their homes. Our sales teams are empowered with the e-sales app and managed to keep the business up and running. Going forward, we will be keeping digital as a strong foundation for our processes to ensure there is a smooth issuance journey for our customers

With increasing awareness towards term plan, thanks to the pandemic, we don't see reduction in demand of term plans despite the marginal price rise in their premiums. Another reason for this is that term insurance premiums in India are competitive compared to other countries

The Q3 performance of the industry was quite discouraging. How do you see the things going forward?

It was business as usual in Q3 of FY22 with life insurance companies continuing to focus on growing their protection business, diversifying the product and distribution mix, improving cost efficiency and profitability, and product innovation through IRDAI's regulatory sandbox route.

Outlook and way forward on the insurance sector?

Life insurance sector in India is expected to increase by 12-15 per cent annually over the next three to five years. Operating models of insurance companies will be reshaped in the future – the rigid organizations with manual processes will turn into digitally enabled, agile, flexible workplaces that leverage the power of data and analytics which will further enhance customer experience and create more business value.

By focusing on the protection business, life insurance players have been driving the value of new business (VNB) - a key measure to assess the financial performance of insurers. As for the next couple of months, we will be focusing on product diversification by strengthening our product solutions.

What are your views on term insurance premiums hike?

With increasing awareness towards term plan, thanks to the pandemic, we don't see reduction in demand despite the marginal price rise. Another reason for this is that term insurance premiums in India are competitive compared to other countries.

What is your product strategy for the year?

Our product strategy has always focussed on balancing the requirements of our key stakeholders - customers, distributors and shareholders. It will continue on the same path in the coming year.

What are your observations for the insurance sector from pandemic to post pandemic?

The world came to a standstill with the coronavirus outbreak of 2019. But given the resilience that the human race is known for, individuals soon learnt to fight back and overcome the hurdles in 2020. In the last year-and-a-half, there was not only a fair evolution in the customer preference and behavior, but also there has been higher dependency on the digital tool and initiatives and the need to inculcate digitization in every process of the business. Companies have switched to a 'digital-first' approach by deploying chat bots as well as investing in artificial intelligence and machine learning to optimise customer servicing digitally. Traditionally, insurance will always be a face-to-face business, but with the help of technology and the opportunities that created the combination of physical and digital 'Phygital' is going to drive the insurance sector for years to come. With the role that technology and digitization is playing in today's time, insurers with the help of AI (artificial intelligence) and ML (machine learning) are now resolving customer related queries through AI-driven chatbots. A higher insurance penetration has been observed along with greater operational efficiency and a better product-mix, which is tailor-made for different audience segments.

Impact of the Omicron variant of Covid-19 on India's life insurance industry at present and what steps is Exide Life taking on the same?

At the time when the Omicron variant was spreading rapidly, there was a global fear of infections. While the variant does not have any distinct impact on businesses, Covid-19 as a whole has a larger impact. The emergence of the virus has reiterated the importance of insurance much more than ever, encouraging individuals to consider it as an essential financial planning tool. Insurers introduced customised and innovative plans for the evolved customers who know the significance of choosing the right plans. Since coronavirus had disrupted the regular functioning of businesses, companies had to revamp their infrastructure at a quick pace. Most companies today are virtually selling insurance to make it a hassle-free experience for the customers.

At Exide Life, we have adopted a digital-first approach where our customers have the convenience to avail our services from the comfort of their homes. Our sales teams are empowered with the e-sales app and managed to keep the business up and running. Going forward, we will be keeping digital as a strong foundation for our processes to ensure there is a smooth issuance journey for our customers.

Your take on Ulips and guaranteed plans as they are gaining a lot of traction in the insurance space and is Exide Life coming up with any new products?

ULIPs and guaranteed insurance products are gaining significant traction of late in the insurance space. This is primarily because of the flexibility they provide to manage the funds and also offer wealth creation along with a life cover. According to a survey by a prominent insurance player, two out of three Indians intend to invest in ULIPs in the current year.

While strategizing the products, insurers factor in the financial appetite and the varied life goals of individuals. What is worth underlining is that amidst the vast range of products in the market, one can opt for a pure risk protection plan, a regular savings plan offering life cover or an insurance plan with the dual benefit of investment as well as life cover. The insurance space has evolved and today there is a product for everyone.

For instance, we recently launched our product Exide Life Smart Income Plan, a non-linked, participating individual life insurance-cum-savings plan that provides regular income during the income pay-out term and guaranteed life cover throughout the term of the policy. The product offers two survival benefit options to suit the customers at the start of the policy – enhanced maturity and enhanced income. This feature empowers the policyholder to choose the way he or she wants to receive survival benefits during the income pay-out term, as per his or her financial needs.

What the company is doing to adapt to newer challenges to serve the needs of the customer?

Corresponding with the rise in demand for insurance products, insurers have simplified the entire policy issuance journey. With technology and digitisation revamping businesses across the sector, insurers are focusing on creating a hassle-free customer experience with a personal touch to win their trust and confidence. Companies today are switching to a 'digital-first' approach by deploying chat bots as well as investing in AI and ML to optimise digital customer service.

In terms of customer acquisition, we were amongst the first in the industry to adopt the mobile-first approach for our sales teams with our digital platform e-sales. We have digitised almost the entire process and empowered our advisors and sales personnel to continue selling virtually. As a result, we are able to on-board new customers digitally, right from the initial meeting over a video or phone call to the time the policy bond goes for printing. At an organisational level, over 95 per cent of our new proposals are now logged in through this digital platform.