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Insurance ‘Aadhaar linking will help the industry design customized insurance policies’

‘Aadhaar linking will help the industry design customized insurance policies’

In an email interview Mukesh Kumar, ED, HDFC ERGO General Insurance says that Aadhaar linking with insurance policies will help the industry to get access to basic information of customers, enabling us to tailor insurance products & services to meet their requirements.
Rosevina Gonsalves Dec 8, 2017

Now that you have merged with L & T General Insurance to become the third largest insurer, what are the new opportunities you are looking at?

Post the acquisition, we now have a balanced product portfolio (motor, health, other retail and corporate segments) along with a balanced distribution mix across bancassurance, agency, broking, direct and online channels.

Going forward, we expect retail segments such as motor, health and personal accident to continue to drive the industry growth and we expect to grow largely on the back of these segments. At the same time, current low levels of penetration in home insurance and cyber insurance represent growth opportunities for us in the coming years.

HDFC ERGO has grown at CAGR of 25% compared with industry CAGR of 17% over the last five years. What has contributed to this growth?

Over the last five years, our market share has improved from 2.7% to 4.9%, in the retail segment, it was majorly driven by motor and health, and in corporate, fire and marine segments. In addition, the expansion of crop insurance segment last year with the implementation of Pradhan Mantri Fasal Bima Yojana has augmented our growth in FY 2017.

What are the emerging trends you see in the general insurance industry?

The recent IRDAI guidelines making PAN and Aadhaar mandatory for insurance policies will help the industry to get access to basic information of our customers, enabling us to tailor insurance products & services to meet their requirements.

Like any other industry, there is tremendous potential for technology/AI-based innovations in the insurance industry. Only a few measures have been implemented (such as chat-bots) so far. Once properly implemented, these innovations would lead to a paradigm shift in the way customers experience insurance in India.

A few fintech companies are now foraying into general insurance. How are you planning to retain your competitive edge in such a scenario?

We believe in offering customized solutions to our retail and corporate customers to meet their insurance needs, by leveraging our distribution, product & underwriting and claims expertise which we have built over the years.

At the same time, we believe the low levels of non-life insurance penetration in India represent adequate opportunity for meaningful players, and as such we are not perturbed by the entry of new players.

Most of your business has come from digital platforms. In fact, digital platforms contribute more than 50% of your business premium income. What digital initiatives have you taken?

We issue about 87% of the policies through the digital mode, either through our channel partners issuing policies using digital platforms or customers directly purchasing insurance policies through various online channels like the website, aggregators or net-banking.

We understand the importance of technology and have been investing in the right technological solutions to support our growth. Also, having built a strong presence on various digital platforms, we have observed that about 40% of our customers renew their policies through digital channels.

Our digital initiatives such as simplified online buying journeys, real-time assistance by our experts, chat bots, mobile application for customers (IPO) and sales force powered with real time analytics create a comprehensive digital experience.

In addition, our agent management system for our partners and integration with partners for real time policy issuance, self-inspection application for break-in cases, online appointment fixing for medicals ensures a well-connected ecosystem of agents, brokers and customer. It creates a model where information is accessible to all stake holders in real time, making it easier for agents and broker to service or contact their customers instantaneously. It also ensures that the customers get an omnichannel & real-time service

How are you planning to increase your business from agency channel?

The agency channel continues to be one of our prominent offline distribution channels. The acquisition of L&T General helped us bolster our agency strength from over 8,500 to over 10,500. We would look to further grow our agency strength and improve our agency activation ratios in order to achieve the next level of scale via this channel.

IRDAI wants non-life insurance companies to make simple products for rural India. How do you plan to offer such products to reach the untapped market?

We believe there are two things at play here – simple products (with simplified and standardized wordings) and lucid, easy-to-understand explanations to the customer. We would aim to develop simpler products and explaining them in a lucid manner to our customers, especially in rural India. We have a comprehensive suite of such products launched for the common service centre (CSC) channel.

Many general insurance companies are coming out with innovative health insurance products. How do you plan to compete with these policies?

We are focused on providing products that are simple to understand and easy to implement. We offer products with little or no sub limits and restrictions so that customers have a hassle free claim experience. Keeping in mind the changing lifestyle, we are launching products to provide health insurance coverage in India and will continue to provide innovative & cost effective products. We intend to expand our product bouquet, keeping in mind the needs of our customers and the feedback received from our channel partners. We will continue to focus on providing innovative and cost effective but easy to understand products.


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