Technology Is Increasingly Becoming All-Pervasive In Insurance Business: Roopam Asthana

Broadly speaking, what’s your outlook for the general insurance business in India? What key trends do you see shaping up over the next few years? 

We have a very bright outlook for the general insurance business in India. The industry is growing by 9 - 10 per cent year on year.  

The first big growth driver is the amended Motor Vehicle Act. People are now coming forward more proactively to insure their vehicles. Thus growth is coming from the existing cars and two-wheelers that were hitherto uninsured. 

The second big driver in terms of motor insurance will be from the fact that motor penetration itself in India is very low. In terms of the number of private cars per 1000 people, India is about 28 cars per 1000 people, China is at 160; so we can see the huge gap between India and China and a large upside possibility in India. Even if you compare with smaller economies, for example in Nigeria it is 76, while in Indonesia it ranges about 100; With improving road connectivity and rising rural incomes, there is a long way to go in terms of the overall private car penetration in India and thus in motor insurance.  

The other big driver of growth would come from Health Insurance. While 40 per cent of India’s population will probably be addressed by Ayushman Bharat, the penetration level of insurance is as low as 15 - 25 per cent in the balance 60 per cent of the population as per NSSO 2014 data. A very large middle segment of India remains largely uninsured in terms of Health Insurance and with the increasing cost of healthcare and the increasing instances of lifestyle diseases, consumers would need to go for health insurance. There is also a move by the Government to introduce universal health coverage which could basically be the upper version of Ayushman Bharat Scheme where the consumers will have to pay the premium, unlike Ayushman Bharat which comes free to the consumers. Simple Health insurance products, priced low, will certainly be one of the key trends coming through in the upcoming years.  

The small and medium businesses all over India are also largely uninsured. For example, a shopkeeper who stores a substantial amount of goods in his shop, it is unlikely that he would carry any sort of insurance. If the risk awareness goes up, these small and medium enterprises will look into buying insurance covers to cover them against fire, floods, strike, riots, etc. This is another growth area for the industry.  

According to me, the general Insurance industry will continue to grow about 15 per cent year on year for the next 5 to 7 years and therefore the industry size would double in terms of the premium over the next 3 to 4 years. 

As insurtech becomes more and more ubiquitous, do you see the role of distributors in general insurance gradually tapering away? General insurance is, after all, a more transactional product than an advisory one. 

Yes, I agree that insuretech is starting to make its presence felt. However, in my belief, the role of distributors in the general insurance sector will remain strong, and in fact, will increase. The primary reason for that is under penetration and the need for insurance companies to reach out to consumers in non-metro, semi-urban or rural areas. In these areas, distributors have to do on-ground activities to identify the customers and advise them on insurance products they can buy to cover the risks they are facing. Also, insurance intermediaries like brokers, agents, banks and other distributions POSPs and IMFs will play an increasingly larger role in increasing the penetration of insurance in India as the larger Indian population does not know about the insurance products that can help them cover some of the risks they face regularly. 

It requires a substantial amount of investment to make insuretech more and more ubiquitous and acceptable. Moreover, people in India still don’t trust buying insurance online. Today, a large number of consumers research online but still buy insurance offline because they believe that at the time of need i.e. during the claim process, it is their distributor/agent who will come to help them. Therefore, buying insurance from a faceless insuretech is still an alien concept. It will probably take a little more time to make the concept acceptable and familiar to the larger population of India. 

What challenges do players like Liberty General face in scaling up their businesses? How are you addressing these challenges in your company? 

The future growth of the insurance business will come from the larger non-metro regions in India. One of the biggest challenges for Liberty General Insurance would be its ability is to reach out to this large under-penetrated population of customers in tier 2, 3, 4 cities and semi-rural to rural areas. The primary way of addressing this challenge is by increasing our distribution footprint across the country which we have already started with. In January 2019, we were present in 60 locations and by December 2019, we expect to reach approximately 155 locations around the country. We intend to cross 200 locations by the year 2020. This network expansion will happen mostly in the non-metro segment.  

In terms of products, we are looking at simpler mass products with a low price range that we believe is going to be more attractive to the consumers.  

Another big challenge is getting consumers to trust insurance companies. We are working on the consumer’s lack of trust by getting into tie-ups with large consumer brands which deal with a huge number of consumers on a daily basis and by selling insurance through our tie-ups with such brands like auto manufacturing companies or transport companies like IRCTC or banks or NBFCs. Recently, we have done a tie-up with IRCTC for the train delay insurance product. 

The next big challenge is the pre-conceived notion in the consumers’ mind that insurance companies do not pay claims. Contrary to the perception, a very large number of claims do get paid. We hope to address this challenge by ensuring that we pay claims in the right manner within the appropriate time frame. 85 per cent of our motor insurance claims surveys are done in-house by our own employees and we can clearly see the difference in the quality of services that we are able to provide to our consumers.  Hence by building their trust as far as our claim services are concerned, and thereby through a positive word of mouth, we expect our brand to become more popular and trust-worthy.  

Tell us a bit about how you have leveraged technology in your business, to improve the quality of your portfolio as well as enable growth. 

Technology is increasingly becoming all-pervasive in the insurance business. We have been using technology to integrate with large brokers and auto manufacturers which enables the online sale of the insurance making it a completely paperless process. Today more than 80 per cent of the motor insurance business is done with the help of technology; the customers walk out with the insurance premium paid receipt and the copy of the policy almost instantly. A big change and shift have happened on the back of technology compared to the past when a lot of cover note used to float in the market and customers had to wait longer to receive their policies.  

Another area where we believe that technology is going to make a big difference and we are investing substantially is in the management of claims. Some years ago we provided tablets to our claims surveyors who could do online data entry right at the garage, thereby cutting down the time it takes for the survey to be completed and assessment to be done and removing the need of the surveyors to come to the office in the morning and evening to complete the paperwork.  

We are now moving to the next level where we are providing the ability to the garages and customers to do claims assessment through photos or videos. All they have to do is take photos and videos of the damage to their car and send it to us and we can do the claims assessment almost immediately. We have already started to see almost 15 to 20 per cent of our claims actually moving through this technology. It is a simpler process for the customer, garages can start the repair work almost immediately and the insurance company also saves their cost since they don’t need to send a surveyor to the garage. It creates a win-win situation for all parties, eventually ensuring a superior experience for the customer. With the help of technology, claims can get settled instantly and the amount can get credited to the bank account of the customers directly.  

We have also introduced renewal through WhatsApp which makes life simpler for our customers. A quote is sent on WhatsApp to the consumer, once she provides the details of her car to us. Within 2 to 3 clicks, the car insurance gets renewed and the insurance policy is available with the customer on her mobile. 

We are also working with the analytics team of Liberty Mutual, our foreign promoter company to create models that will help us underwrite better and understand our risks better. We continue to invest in technology to make life easier both within the organization and externally for our customers.  

Are you specifically looking to carve out a niche in any specific general insurance product? What would your product strategy be at this stage, broadly speaking? 

Motor insurance is our primary product and we want to be ultimately specialists in motor insurance and be more innovative in terms of products in this space. Unfortunately, at this point of time, the regulation does not permit us to introduce more innovative and more customer-friendly products as we would like to because of the way the policy wordings are ingrained in the regulations. However, we have submitted a couple of applications in the sandbox approach which has just been introduced by the IRDAI to look at some product variations which we believe are useful to the consumers. In consultation with the regulator, we would like to introduce more and more innovative motor insurance products based on consumers’ needs and demands.  

The other area where we think there is enough scope to work is on health insurance. We are participating in two big lines of health insurance which is the group health insurance or the corporate health insurance as well as the individual or the retail health insurance and we will continue to build our portfolio in both of these areas. We have a fairly attractive portfolio of health insurance products and we will continue to extend the product line basis demands from our customers.  

On the people front, what’s your strategy like? Do you face any issue with respect to retention, especially at the ground level? How do you address HR challenges? 

In Liberty General Insurance, besides business targets, we also have targets in terms of employee satisfaction. We not only aim to build the culture of superior customer experience but also of superior employee experience. This is why we tend to take a pulse of our employees on a regular basis. Clearly, retention is the big area of focus for us and our belief is that if our employees are professionally adept and are able to add to their professional capabilities then they will continue to stay with the company. We are looking at various interventions, be that in terms of development programs, external guidance, internal training etc. to strengthen the professional knowledge of our employees further and hopefully make it much more challenging for them. Also, we do believe that we need to move our employees laterally across the organization from one function to the other and that would probably be more satisfactory for our employees rather than simple vertical elevation. 

Lastly, do tell us a bit about your business goals for the next fiscal. 

As mentioned above, we continue to expand both in terms of geographies as well as products. On the growth front, from April to September 2019, we have grown about 35 per cent year on year. We hope to continue this pace of growth going ahead as well.