We Expect To See More Innovative Products To Be Launched In 2019: Ritesh Kumar, HDFC ERGO General Insurance Co

What key trends do you see materializing in the General Insurance space in 2019? Do you see this as a year of digital disruption as a clutch of exciting FinTech players enter the fray?

The year 2018 saw numerous developments and changes in the insurance sector, which benefitted policyholders as well as insurance companies. With traditional non-life insurance products continuing to become simpler and standardized, we expect to see more innovative products being launched in 2019 to cover emerging risks. In addition, recently launched products such as title insurance for property owners and cyber insurance for individuals, will witness higher demand. Since businesses offer personalized experience to customers these days, we expect insurance companies to adopt newer digital modes / processes in order to increase their social media engagement to meet customer expectations. 

Insurance industry has already taken big leaps in 2018 in an attempt to digitize processes for the customer, wherein InsurTech companies have been playing a big role in changing the digital landscape across lead generation, claims management, customer service, etc. There is an increased adoption of digital solutions augmented by the extensive use of analytics-driven insights, which is shaping the service architecture with the entry of new FinTech players. With the use of technologies such as AI, Machine Learning, Data Science and Deep Learning, companies are building Chat bots, Robotics, Voice based solutions to engage and service customers. This has also benefitted the companies significantly in terms of efficiencies, scalability, enhancing customer experience and redefining customer acquisition process. These trends, especially increased adoption of digital solutions, are likely to continue in 2019

What scope do you foresee for the domestic General Insurance business beyond Health & Motor? Do you see the demand for any innovative products picking up sufficiently so as to become significant business lines in themselves?

While insurance products for traditional risk covers such as motor and health continue to get simplified at one end, new risks continue to emerge at the other end. The past few years witnessed the industry launching a slew of products covering new risk segments, to name a few:

· Cyber insurance, for providing comprehensive protection to individuals and their families against cyber-attacks, cyber frauds or digital threats that could lead to a financial loss and or reputational loss

· Title Insurance, providing indemnity to property developers and the subsequent owners of the property against losses and risks related to defects in the title of the property 

· Inherent Defects Insurance, providing cover to new buildings or civil structures against any damage caused by inherent structural defects

· Solar Energy Insurance, for non-traditional and non-physical damage related risks that solar projects regularly face. The policy will cover anything from utility-scale solar farms and green fields across India, to portfolios of rooftop installations for commercial and residential builds

All the above segments hold promise and which one will grow faster than the others is anybody’s guess. Considering the increasing penetration of internet and smartphones in India, it is likely that cyber insurance emerges as a sizeable business segment in the coming years.

Tell us a bit about your Chat Bot…

HDFC ERGO has Chat bot DIA on the website. AI enabled DIA is able to answer several of  customer queries and we continue to enrich the same to provide convenience to customers who are comfortable interacting with Chatbots.  With voice technology being anticipated as the next big thing in the digital journey, HDFC ERGO also launched Chatbot ‘DIA’  on voice technology solutions like   Amazon Alexa and Google Home. DIA on these two platforms  provides a host of services such as locating nearby network garages /hospitals /branches, request for policy soft copy, guidelines to make policy correction, renew policies and seek information on products offered by HDFC ERGO and various other customer friendly services.

Tell us about a few digital innovations that you led in 2018, as well as some key highlights of the year gone by…

At HDFC ERGO, we believe in constant innovation that will benefit and redefine customer experience and 2018 has been another pioneering year wherein we have added new milestones on this journey of excellence. Digital initiatives provide new opportunities to businesses and also offer enhanced platforms to service customers. 

It has been observed that customers have shown a keen propensity to move towards digital services and self-service mode. To help build on this digital trend; we have empowered our entire ecosystem digitally, which includes customers, our channel partners, claims surveyors and other service providers. We have an internal innovation lab which was setup 2 years back, wherein our digital experts experiment with emerging technologies to design the best solutions for our customers.

Our underwriting processes have undergone tremendous amount of digitization and automation which has helped to reduce the turnaround times in claims, making the process seamless for customers. With our AI based solutions we are able to approve pre-authorization and discharge  of health claims under 15 minutes. Our digital platforms helps our customer and channel partners and issue health & motor policies within 5 minutes. 

In addition, HDFC ERGO’s Insurance Portfolio Organiser (IPO) Mobile Application has been built keeping in mind all of customers’ needs and preferences. It provides a wide range of services such as locating of hospitals through geo-location, resolving customer queries and renewing of policies. Our customers can perform a self-survey of their vehicles by sharing pictures & videos on the application which eliminates the requirement of a physical survey, thereby fastening the renewal process. Additionally, the ‘my:health’ feature on the application is a one stop shop for a customer’s health needs, guiding them towards a healthy lifestyle. 

Besides, there are a host of other technology solutions being actively adopted by HDFC ERGO in order to take customer experience to the next level. These include Robotics Process Automation and  Voice Analytics. With the use of Robotic Process Automations (RPA), we intend to stay ahead of the curve by trying to reduce manual intervention, thereby processing policies & claims with great speed and accuracy. This has helped us improve our turnaround time and optimize processing costs, thereby making our products affordable, without any compromise on the quality of services. 

At HDFC ERGO, we aim to continue on this path and setup cognitive technologies in most of our business processes and decision making, in order to build and sustain a more fulfilling customer experience. 

What would your advice be to consumers while shopping for a Health Insurance Plan? The buying process is often complicated and the decision variables are complex and multifaceted…

Prior to purchasing a health insurance policy, an individual must consider the following:

· Buy early: Premiums in the younger age group are cheaper as one is less likely to make claims in earlier stages of life. Also once one conceive a specific disease not all plans may cover that specific disease. It’s important to discuss this with the insurance company before one select such a plan.

· Ensure that you make all the necessary disclosures, and undergo pre-policy tests as required: It is important for persons who propose for insurance to make complete disclosures about their medical history and undergo pre-policy tests as per policy requirement. This helps the insurer to make right decisions with respect to policy acceptance and ensures a more seamless experience in event of claim. Additionally, many Insurers pay for the pre policy medical tests

· Buy a base hospitalisation product first: There are various types of health insurance products available in the market, from base hospitalisation cover to add-ons to top-up covers. It is important to highlight that the first medical insurance product one should opt for is the base hospitalisation cover. After that, one may opt for a top-up or a critical illness product or add-ons to augment this cover, however the base product covers the most common requirement and should be one’s first choice when buying health insurance.

· Sum Insured should be adequate, keeping today’s costs and medical inflation in mind: The Ayushman Bharat scheme launched by the Government of India, offers Rs. 5 lacs Sum Insured which is a clear indication of the benchmark bare minimum sum insured one must choose. If the individual resides in a small city, then the Sum Insured should be around Rs 5 lacs, at least.  But, in case one lives in a larger metro, the Sum Insured should ideally be between Rs 7.5 to 10 lacs. Remember that the premiums you pay are not an expense, rather they are an investment in safeguarding your cashflows.

Do you think there’s a sizeable market for cancer or heart related benefit products? How does one control portfolio risk in such a product – especially with forebodings of both these illnesses assuming pandemic proportions in the years to come?

A Critical Illness insurance policy provides a comprehensive cover for critical ailments. It is a benefit product, i.e. it provides a lump sum amount on diagnosis of listed critical illnesses such as cancer or a stroke, subject to terms and conditions of the policy. Considering our population and the high costs involved in treating such illnesses, the market for such products is certainly sizeable. 

Presently, there are two types of CI products available in the market – those which cover multiple listed critical illnesses, and those which offer separate cover for each of the critical illnesses, such as a cancer cover. From a customer’s standpoint, it is advisable to opt for the product which offers cover from multiple listed illnesses, so that one is protected against the most common critical illnesses. At the same time, appropriate pricing, prudent risk selection norms backed by adequate reinsurance protection and having a comprehensive bouquet of insurance products enable an insurance company to suitably de-risk its portfolio from concentration risks to a product like CI. 

According to reports, you’ve joined the PMJAY bandwagon after initial hesitation. What led to this decision?

The Ayushman Bharat-NHPS programme aims to cover over 10 crore vulnerable families (approximately 50 crore beneficiaries) and provide health cover up to Rs 5 lakh per family per year. The programme is being said to be the world’s largest health protection scheme. The aim of the programme is two-fold: 

a) To strengthen primary health care, improve infrastructure and number of healthcare professionals, which has been lacking in the country 

b) To offer financial protection from catastrophic expenditure, often encountered once a family member is unwell and needs long-term health care. 

Therefore, in line with our focus on retail health and in order to ensure our participation in this largest health insurance scheme which will benefit a large section of the country’s population, we have participated in this scheme.

Lastly, tell us about a few of your key business goals for 2019…

For the period ended December 2018, we have grown faster than the industry and our market share now stands at 5.3 percent. Our gross domestic premium for this period is Rs. 6540 cr, representing a 19 percent growth rate vis a vis 13 percent growth for the industry. Keeping this momentum going, our goals for 2019 are focused on driving innovations and offering seamless customer experiences.