“Consolidation is a natural outcome after rapid growth and competition therefore, that phase is inevitable”

As a business, what are Future Generali’s focal areas going to be this FY? Are you pushing more for new business or focusing more on deepening existing client relationships?

At Future Generali Life Insurance, our two key focus area are (1) Profitable growth (2) Driving our NPS score through improved customer touch point experience. Given the huge potential that lies ahead of us in this market, we are going to fire all cylinders to acquire new customers through enhanced distribution access and on-boarding experience. Likewise, there lies a great opportunity to serve our existing customers well and provide additional products that address their unfulfilled needs.

We were the fastest growing life insurance company both on total premium and policies for the last financial year. Though this growth came off a small base, we are confident of the efforts our teams have put in place in establishing a sustainable growth model which will help us grow rapidly in the coming years as well. We will be adding strength to our existing distribution and build new channels to augment our growth.

In your view, what steps are required to ensure a cleaner distribution ecosystem with better 5th year persistency levels? We are at a dismal 22% right now – far lower than the global average?

Our growth model is predicated on principles of customer centricity and, our brand ideology is to make Insurance Simpler, Smarter, and Faster for our customers and distributors alike. Persistency therefore, is a key metric that is owned by everyone across the sales value chain and co-functions in the organization. In my opinion, this is not only about distribution ecosystem but the culture of the organization. Ownership of customers and their satisfaction is an organizational goal hence, limiting it to distribution is not a wholesome strategy.  Having said this, distribution is the most influential touch point and originator of sale therefore, we need to look at enabling the distribution by giving them simplified products, self-service tools, timely & consumable information supported by multi-channel touch points and servicing platform.

At Future Generali Life, we have invested significantly across the spectrum in the imperatives mentioned above. We are focusing on improving front end sales process facilitated by technology and have made persistency a KPI for all management team in the company. With our collective efforts in this direction, we have started seeing rapid improvement in the scores. However, our destination is still far but we are confident of reaching there faster.

Apart from what the actions being taken by the industry, the regulator is very keenly involved in improving this metric. Various steps being taken in the area such as customer education program, simplification of products, digitization focus, committees being formed etcshall ensure that the Industry moves in the desired direction consistently.

How do you see the industry shaping up going forward? Do you foresee more consolidation, with smaller players exiting the fray? Do you see LIC’s stronghold loosening?

Consolidation is a natural outcome after rapid growth and competition therefore, that phase is inevitable. And, we have seen some developments already in the Industry to this point. However, the trend I foresee going forward is of sustained growth that may or may not be driven by consolidation. Developments in the economy as well as in the Industry in the recent past are pointing towards exciting time for the Industry which should augur very well for customers, distributors and all stakeholders alike. There is enough and more for everyone to participate in so, what you need to grow is a strong business model and high standards of execution.

Do you foresee ULIP’s as having a bright future? What do you have to say about the ironic trend of ULIP market shares falling after they, in fact, became better financial instruments?

ULIPs - being a long term investment product, are ideal for long term wealth creation, savings & protection. Over last few years, a part of retail investment has moved away from physical assets like real estate and gold to financial assets like Equity, MFs, Insurance, bonds and fixed deposits. Interest Rates have been falling since the last 2-3 years making the small savings schemes unattractive.

 In a low inflation and low interest rate environment, as corporate profits start going up, equity as an asset class generates better returns for investors. With robust FII/DII inflows and ever improving macroeconomic fundamentals of India, equity linked ULIPs are likely give good returns and provide protection as well as create wealth for investors. We have started seeing good demand for ULIP products.However, investors should keep in mind that equity markets are volatile in nature, so investments should be made for medium to long term only.

How do you see the IMF channel shaping up over the next few years? It started off with much noise, but it seems to have quietened now. Do you foresee this as a feasible distribution channel for Life Insurance?

The IMF channel is in its nascence as a distribution model. We see this as a great opportunity for successful retail financial services distributors to professionalize and grow their business by offering diversity of products and solutions. As for any new initiative, there is a learning curve and as we keep moving ahead and operational solving issues we will see the model growing rapidly.

We have started our journey and got reasonable success and critical learnings from it. Now, we are looking at scaling the model and would like to see it contributing 3-5% of our top line over the course of next 3 years

Are you a believer in the efficacy of traditional policies as savings tools? Do they not provide very low returns, with just a sliver of death benefit attached? To top it off, there benefits are represented rather opaquely.

Let’s put things in perspective here - We are a Savings oriented country and our protection coverage per capita is abysmally low. Also, financial literacy in India is still to catch up. Most customers prefer keeping their savings in bank accounts and do not prefer dealing with complex products involving technical explanations.Traditional policies operate at the balance of savings and protection and they are simple to understand therefore, there is a clear need for such products where household can park small amounts compulsorily and enjoy the benefits of protection as well as lumpsum payout at the end of the tenor. These products also provide the required liquidity by way of money back payments and offer option to avail loans against policy in time of need. We believe this is a powerful proposition and we have consciously designed very simple products with defined benefits for customers so that they do not have to go through post purchase dissonance. This is also key to our initiative on improving persistency in the business.

What are some of Future Generali’s planned initiatives on the digital marketing side this year? What focal areas will your new CMO Rakesh Wadhwa target to begin with?

Our Digital ecosystem is evolving rapidly with focus on delivering value to all stakeholders. Digital therefore, to us is not just a marketing theme but an organisational imperative to remain competitive and grow faster. We are of the strong belief that in a market where products are increasingly becoming generic, we have to focus on customer experience to reflect deliver our brand promise (Simpler, Smarter, Faster). We have been making and continue make investments in our back end automation and to make our platforms more agile and robust. We will also be investing in building data analytics platforms, front-end sales automation, online presence and user centric technology. Basically, we want to be in a perpetual mode!

Given that Digital is core to our strategy, it was critical to us that it converges under single ownership with someone who has an end to end of view of strategy and execution covering customer, distribution, business and brand. Rakesh comes from significant experience in the Industry, a strong business background with a passion to innovate and deliver value to customers and distributors alike. His key focus areas will be establishing Future Generali as a preferred brand, build strong omni-channel platforms, accelerate the increase of our Net Promoter Score (NPS) and increase the share of direct to customer channels through analytics driven marketing strategies.