The pandemic has belittled life’s value. Never before has insurance gained more significance, requiring stakeholders to adapt to a new normal. Here we discuss how insurers embraced digital technology to revolutionise customer experience overnight.
Abhijit Gulanikar, President - Business Strategy, SBI Life
In Conversation with Debjoy Sengupta, Editor, Outlook Money
#OutlookMoney #Money #OutlookMagazine #OutlookGroup
Abhijit Gulanikar, President - Business Strategy, SBI Life
In Conversation with Debjoy Sengupta, Editor, Outlook Money
#OutlookMoney #Money #OutlookMagazine #OutlookGroup
Category
🗞
NewsTranscript
00:00 [Music]
00:11 Good afternoon, ladies and gentlemen.
00:13 Welcome back to Outlook Money Insurance Summit presented by LIC
00:17 and partnered by SBI Life, Exide Life, and Grady.
00:20 I am Devjoy, Editor, Outlook Money, your host for this informal chat session
00:25 on a new era in consumer experience with Mr. Abhijit Gulanekar.
00:30 Mr. Gulanekar is a veteran in insurance and asset management.
00:34 He is currently President, Business Strategy at SBI Life.
00:38 His responsibility involves designing strategies for multi-channel distribution models,
00:42 bank assurance, retail, and corporate agency.
00:46 He is in charge of improving existing business practices and designing new and innovative ones.
00:51 Mr. Gulanekar, welcome to the summit.
00:53 Thank you.
00:54 As you are aware, the global pandemic has belittled life's value.
00:58 The year 2020 has been an eye-opener for us.
01:02 Never before has insurance gained a greater proportion of significance
01:05 requiring stakeholders to adapt to a new normal.
01:08 So, Mr. Gulanekar, let me begin by asking you,
01:11 to what extent was consumer acquisition affected initially during the pandemic?
01:15 In April, you know, life insurance industry typically had lower sales value.
01:21 But this April was, you know, totally quiet.
01:25 I think most of us were, you know, locked out at home.
01:29 And people were trying to figure out, you know, how to go on with their basic day-to-day functions
01:35 that, you know, we had taken so many things for granted.
01:38 So, the first quarter was slow for insurance sales.
01:43 Both there was uncertainty from customer side.
01:47 And in fact, if you ask me, more uncertainty from the distributor side.
01:50 The sales agents or bankers who distribute insurance or convince the customers to buy insurance,
01:58 they were also not able to come to their office or go and meet the customers
02:03 or what the normal practices were.
02:05 Of course, after that, you know, the things have recovered quite fast.
02:09 So, when you see YTD October, the latest number that have been declared,
02:14 you know, insurance industry on a AP basis.
02:18 You know, single premium taken at 10% is down only 4% compared to last year.
02:23 And renewal premiums from whatever information I have is showing strong growth for SBI Life also strong.
02:30 So, new customer acquisition, yes, clearly affected in the first couple of,
02:35 but it's not from want of customer needing the product, but it is more question of fulfilling.
02:43 So, it is like logistics disruption in a manufacturing place rather than demand for the product.
02:49 I think demand for the product is healthy, especially protection products is very healthy
02:55 because people have suddenly realized what uncertainty means, which was no, no.
03:01 People knew, but you know, you knew, but you didn't feel that it was necessary, right?
03:05 You said, okay, but it did not happen to me.
03:08 But in this pandemic, it has clearly brought it to the fore as to how uncertainty can affect life.
03:15 On the savings and unique products, there is, was some slowdown initially,
03:20 but that has now completely reversed.
03:22 I think people are coming back.
03:24 But having said that, if, you know, if incomes get affected, if job loss is there,
03:30 you know, that part of the business may get affected a little.
03:34 Of course, the initial signs don't seem to indicate any of that.
03:38 So, first quarter was super slow, but after that things have picked up quite a bit.
03:43 Yes, people realize the importance of insurance and naturally demand rose.
03:47 But delivery, therefore, is a question.
03:50 And many insurance companies jumped up to meet consumer expectations.
03:57 So, my next question, therefore, is what triggers made you realize that the segment
04:02 needed a rapid transformation in customer engagement and the ways business is conducted?
04:08 There have been multiple changes that, you know, both customers have done and insurance companies have done.
04:13 So, let me start.
04:15 So, we were already, you know, onboarding customers digitally for the last couple of years.
04:20 Last year also more than 95% of our customers were onboarded digitally.
04:25 But even in our digital process, there was one final form, which was, you know,
04:31 a wet signature where we had taken some declaration from the customer.
04:35 Now, this year we have done away with that also. The regulator also had helped.
04:39 So, now we have from April end onwards or early May onward, a completely end-to-end digital process
04:46 in which there is no manual, not even one-page signature on declaration or anything.
04:53 So, that process has changed completely.
04:56 Second, earlier customers, when they wanted to take important financial decisions,
05:01 they wanted to meet the distributor face-to-face.
05:05 Now, they are open. There are still some customers who would want to meet face-to-face
05:10 before they take the final call.
05:12 But there are many customers which are ready to do a Zoom call or an equivalent video call
05:18 or a WhatsApp video call, whichever way you want to look at it.
05:22 And, you know, discuss with the distributor digitally, understand the product features digitally
05:28 and then decide, you know, what financial decision they want to take.
05:33 So, these two, I would say, are the base level changes which have happened.
05:38 Very important, they have long-term ramifications.
05:41 The second important part which we are seeing is increasing use of, you know,
05:49 group meetings within the sales team for coordination.
05:53 Earlier, group meetings would be physically in our branch, in our office, you know,
05:59 to exchange ideas, to do training, to upgrade skills of the distribution force.
06:05 Now, all these are happening digitally.
06:08 Even when things have opened up and now, you know, office meetings are possible
06:13 with certain precautions, I think people still prefer to have all those meetings.
06:18 Whether it be training meeting or be it review meeting happening, you know,
06:23 digitally over some platform that is available to the insurance company.
06:28 So, that is, you know, second level of change which has happened.
06:32 The third level of change which has happened, which is, you know, slowly happening
06:37 and, you know, it will evolve as the time goes back is how the marketing is done.
06:42 So, initially, what used to happen is you would have some sort of advertising
06:48 which will be done on TV, which will continue TV or print media or some other mediums
06:53 which will continue and there was some digital advertising, you know, done,
06:58 some social media marketing that was done.
07:02 Now, that social media marketing or digital advertising has become very evolved.
07:08 It is specific to the customer that is browsing.
07:12 It is specific to the profile of the customer.
07:15 It is specific to the local area of the customer.
07:18 It is, you know, suggesting, you know, which distributor that customer can meet
07:23 or which branch of SBI Life he can go and meet.
07:26 Earlier, it was overall, you speak to SBI Life, you know, and if you want to speak,
07:31 you give a missed call on this number.
07:33 Now, it is much more personalized than that.
07:36 So, of course, this is evolving, but this marketing piece will, you know,
07:41 undergo tremendous transformation.
07:44 Second thing is the customer journey.
07:46 You know, it has changed so often in the past.
07:48 It's the same set of questions essentially we have to ask.
07:51 We have to have the KYC of the customer.
07:53 We have to have medical history of the customer.
07:56 We have to have the family history of the customer,
07:59 get some assessment of what is the financial goals the customer is trying to solve
08:05 or fulfill using our financial solutions of product.
08:10 But the way they get asked and the kind of details we ask,
08:15 the level of automation we do, has changed quite a bit over the last, you know,
08:20 few months and that trend got accelerated because of…
08:25 Yes, of course.
08:26 In a way, the pandemic has helped accelerate the digital transformation.
08:29 Products are now more tailored for meeting specific customer requirements.
08:33 Absolutely. So, still I would say we are in early stages of personalization.
08:38 It is much more personalized than what you would have seen, you know,
08:41 maybe a year back or 18 months back.
08:44 But there is still a long way to go.
08:46 It is significantly less than personalization that is offered by people like,
08:51 say, a Netflix or an Amazon.
08:55 Also, what we will also do and which we are already doing is personalization
09:00 is to the customer directly, but same aids are also now available to our distribution force.
09:05 So, they will also be able to be in a much better position with few questions asked
09:10 to get solutions to the customer that they meet either digitally or face-to-face.
09:14 In these days, mostly digitally.
09:16 Mr. Gulanikar, so what were the bottlenecks in transforming customer experience?
09:20 Many bottlenecks. I think the first bottleneck is still the underlying behavior
09:25 of the customer is not fully known.
09:28 The way to look at it is we have a large amount of online customers who visit various sites
09:35 but don't visit enough insurance sites because they will browse something else.
09:39 So, traffic for a typical insurance company website will be significantly less than
09:45 the traffic that is there available on the internet.
09:48 But at the same time, we have a fairly large customer base,
09:52 more than 1 crore individual plus group customer base that we have.
09:59 In fact, it is nearing 2 crores if you ask me.
10:03 Most of them will be acquired on the offline space, correct?
10:08 Physically through our agents or through our bank partners or through our other corporate agents, etc.
10:13 Now, how do you and those customers, most of them, if not all of them are going on the internet,
10:19 browsing something, shopping, reading news, watching TV, OTT platforms or whatever.
10:26 So, how do you marry the two is the biggest challenge which we are solving.
10:31 As I said, it is early steps. We may have solved it partially,
10:35 but there is still a long way to go as to how.
10:38 So, how do you, you know, that to my mind is the biggest bottleneck of how to convince customers
10:44 and to provide the right solutions at the right time to the customers.
10:47 Yes, during the initial days, as you say, when the pandemic hit India,
10:53 all companies realized that they need to transform their processes.
10:56 At SBI Life, what were the areas that needed required, that required immediate attention?
11:02 So, what has happened is, if you ask me, digital sales are very large,
11:07 but they are strictly not online because there is a person involved to convince the customer.
11:14 Okay, so there is an audio or a video call to the customer and then the fulfillment happens digitally.
11:20 So, that digital process was changed, as I said, completely to make it 100% paperless.
11:26 Earlier, there was one small part of paper which was left.
11:30 And then there are various nitty-gritty below that as to, you know, what is the level of,
11:37 you know, how do I say, character reading, automated character reading
11:42 that is available for the proofs that are, you know, uploaded by the customer and stuff around that.
11:48 So, that has also improved.
11:50 You know, earlier, if we could do only for Aadhaar or a PAN number,
11:54 now we can do for, you know, four or five different kinds of customer identification,
11:59 even for driving license, even for voter ID, because, you know, these documents change from state to state.
12:05 So, they are not standardized in that sense.
12:07 So, when you do, so there are, you know, many of those optimization items which are required.
12:13 Some of the insurers may have done it earlier, some may have done it later.
12:16 But, you know, all of them have done it post-pandemic.
12:20 Okay, so the final aim would thus be to offer products, prices,
12:23 of which would be based on risks associated with the environment, the city they stay in and their lifestyle.
12:30 Can it be specifically tailored to meet their cover requirements and financial goals?
12:35 So, we do have, so let me just, there is a solution as to what level of, you know,
12:42 some he needs to build for his, you know, retirement or some sort of financial goal may be have.
12:49 What is the level of protection, either on term or critical illness that is appropriate for the person?
12:55 Those level of personalization definitely happens.
12:59 But unlike in non-life player, in life there are, you know, some minimum, some minimum pricing that we have to put as a part of our product.
13:08 And we can charge only that price.
13:11 And only for some people who have health problems, for them we may want to charge a little higher.
13:19 Or in certain cases, if the disease is very severe, then even decline the cases.
13:24 So, on pricing, our freedom is significantly different from the pricing freedom that is available for some of the other general insurance company.
13:35 But yes, the solution that is offered is as personalized as possible.
13:40 Again, because of privacy regulations and all, there is only some kind of data that is available.
13:46 And that is where marrying our existing database with the online database in an appropriate manner is where this personalization can improve.
13:57 People like this doesn't violate the privacy rule, but still allows you to categorize customers based on, you know, various micro segments.
14:06 So that kind of stuff is still evolving.
14:09 I think there is, as I said, a long way to go, but that is the direction in which life insurance companies are heading.
14:16 The regulator has allowed many changes for customer benefits.
14:19 One example is doing away with the requirement of getting wet signatures.
14:22 What else do you think should be in the pipeline in terms of policy tweaks?
14:26 So I think most of the things we wanted have come from the regulator.
14:32 So video KYC was allowed, which was one of the demands.
14:36 Now there is some discussion around exams that we conduct for our distributors.
14:43 So every distributor in life insurance has to be licensed and he has to pass one exam.
14:49 So there were some challenges around that.
14:51 So that also I think is getting sorted.
14:54 So that is under cards right now as to how do you do licensing and examination of the distributor.
15:00 So that work is under discussion, almost we'll get over very soon.
15:06 And we expect, you know, how do I say online exams to be given?
15:10 Otherwise, there were classroom exams that have not yet happened, but I'm sure that it is on cards and we hear it will happen anytime now.
15:18 So other than that, it is actually up to the insurers how they use the, you know, online capabilities to improve the customer experience.
15:29 From the regulator point of view, there could be some tweaks around how products can be modified quickly.
15:36 But I think there are more than enough products or solutions available, which we need to reach out to customer in a more, you know, how do I say appropriate manner,
15:46 which exactly, you know, it is not only the right solution, but also the right time that you need to approach the customer.
15:55 So that is something is more work to be done by insurers rather than the regulators.
16:01 So the good part we are seeing policyholders, the persistency levels have dipped only marginally, even though leeway was available.
16:09 So that is the first advice I give you that unless, you know, it is extremely difficult, you continue to pay renewal premiums on your existing policy.
16:19 Because the longer you hold the existing policy that you have, you know, the more benefits you get out of that product.
16:26 Your life is covered and if it's a saving or a ULIP policy, the return that you make on the policy also increases as you hold it longer.
16:33 So this, to my mind, is the first advice that I want to give for the existing policyholders to continue to pay renewal premiums.
16:40 Second advice for people in general is obviously stay safe, safe, healthy.
16:46 COVID has yet not gone away. There will be, you know, of course, I hope in India it will not be that severe.
16:53 But you are seeing in some geography that the second wave is as strong or if not stronger than the first wave, at least in terms of infections, in terms of mortality.
17:03 Hopefully it is lower than the first wave. But yes, it has not gone away.
17:08 So till the vaccine comes or some solution comes, you still need to be careful. You can't say because the businesses have started working, you know, economy has opened up, that the precautions you were taking earlier, you need to stop taking.
17:24 So that, to my mind, is the key advice, you know, most policyholders will follow.
17:28 And I think in terms of awareness that life is uncertain, I think they are already aware that I don't think there is anything, you know, we need to convince any more to these people.
17:40 Okay, so now you get a better product from the insurer. From the consumer's point of view, Mr. Gulanekar says pay your renewal premiums on time to keep the cover in force and to get better return.
17:52 So, viewers, happy investing and don't forget to pay your premiums. Thank you very much, Mr. Gulanekar, for the wonderful session. All the best to you.
18:01 My pleasure. Thank you very much.
18:03 With that, we come to the end of this short session. Thank you, viewers. Stay tuned in for the next session on winning customers with improved engagement strategies.
18:12 [Music]