'We Are Witnessing Rise in Term Plans Purchase': Tarun Chugh, MD & CEO, Bajaj Allianz Life

Since the onset of the Covid-19 pandemic, what challenges has the life insurance industry faced?
With the onset of the first lockdown there was confusion amongst the customers, and the uncertainty of the pandemic led them to hold on to cash. Spending became need-based and this shift impacted the top-line of insurers, which was visible in the industry’s Q1 numbers with several players reflecting negative growth while others like us had a muted or flat growth. Having said that, I believe as an industry, our risk and crisis management strategies enabled us to roll out business continuity plans to align with the needs of the customers in the new developing business environment. Moving swiftly to digitisation, introducing new-age products, and the regulator introducing customer-centric guidelines and initiatives, enabled us to help our customers with their long-term life goals. I believe that the year will end on a positive note for the industry as a whole.

There is a mind-set shift among consumers from savings to protection products due to the rising uncertainty around health and safety, will this trend sustain in the future and will motivate life insurers to innovate in this category?
With the risk perception increasing amongst customers, we are witnessing a rise in term plans purchase. Furthermore, with the uncertainty around us, guaranteed plans are also seeing a similar trend. It is interesting to see how life insurance is moving to push product from a pull product. IRDAI has also now asked insurers to introduce Saral Jeevan Beema, a standardised term plan, and I believe that will further help in the penetration of life insurance in the country. Innovation will not be limited to product design, but is now seen across the board, especially in the customer service and operations side of the business.

What are your views on millennials purchasing life insurance products? Did you witness an uptick in awareness or inclination from this segment during lockdown in the industry?
There has been in an increase in term plan purchase across customer categories, including millennials. In the lockdown period, we saw a slight increase in this category as well – from 42% to ~50% as compared to the same period last month. Not only the mix, the absolute numbers (in this category) also increased by almost 70% in the FY21 H1 (compared to same period last year). We saw millennials buy more traditional and term plans and the number of policies in this category grew by 42% versus 21% for the overall population.

How has continuous upgradation in technology in the insurance sector helped customers, especially senior citizens, during these times with limited mobility? How did the company simplify this process for them?
The Covid-19 pandemic has fast-tracked the digital transformation journey for the industry. Several processes such as underwriting, customer meetings, service of policy etc.– all moved online. With social distancing becoming a norm, customers are increasingly accessing our digital channels for their policy servicing requirements, while we are ensuring that our digital access points are being enhanced and upgraded regularly. With limited physical meeting, the insurers have leveraged technology to digitize the face-to-face interaction. We are continuously trying to design services keeping our consumer and their needs at the core of innovation. For example, to simplify the annuity pension claim process for senior citizens, we have enabled a digital life certificate process wherein pensioners can submit their Certificate of Existence (COE) via i-Serv video calling facility available on Life Assist customer portal, app and on WhatsApp. We have also simplified and shortened the buy journey through pre-filled forms, PASA offers, etc. Technologies such as Smart Assist, Life Assist, Chatbot - BOING helps customers throughout their journey towards securing their life goals.

With policy issuance and payment happening primarily online these days, there is a heightened risk of frauds and cyber-crimes. What do you think is way to safeguard consumers and businesses from such malicious activities?
We shouldn’t ask our customers to choose between great service and privacy/ security – we need to offer them the best of both. It is essential for companies to have strict data policies, firewalls, and robust network security systems due to increased digitization. This is one of the categories to collaborate with FinTech companies, integrate ML, data analytics, AI and other upcoming technologies to ensure the ecosystem is well protected.

You have recently launched Smart Assist, can you explain the service in detail and how will it benefit the consumers?
Smart Assist is first-of-its-kind safe co-browsing service launched in the industry. It’s a safe technology, created for the benefit of the customers and our sales force, alike. This innovative technology solves the problem of communication during social distancing between the customer and the sales representative. The revolutionary service helps our sales force and customer connect virtually, in real-time while following social distancing protocol.

Prior to the pandemic, selling life insurance was all about face-to-face meetings while taking the customer through their need analysis and offering a suitable life insurance plan, accordingly. When COVID hit, these meetings did move to the virtual/digital world, however, for the final sale a meeting was essential. Smart Assist now ensures that sale moved face to face meetings to screen to screen meetings. My sales representative can sit in his/her home and then engage with the customer, who is sitting in his home, and ensure they are explained every step in the purchase journey. The innovative tech-enabled service is designed to deliver a safe, contactless yet personalised experience to customers. It brings transparency throughout the process and can help build confidence in the customers. We have received an overwhelming response on Smart Assist, since its launch. We have seen over 45,000 sessions by over 5,700 unique users transacting on it. It is being used extensively by our sales force and partners alike, and the customer experience has been really positive.

Life insurance sector recovered in the month of September with 26.5% growth in comparison to the previous quarter. Will the industry be able to sustain this growth?

The industry had faced challenges in the first three months of Covid-19 pandemic setting-in, however post that there has been a spike in retail new business premiums. We have registered a growth of 10.7% for YTD Sept 2020, in individual rated new business premiums, while industry over the same period de-grew by 7.4%. In terms of number of customers, we have seen a growth of 45% during the same period, however the ticket size has been modest, as term plans have low premium. Moving ahead, the industry will see customers also coming back to ULIPs. However, sustenance depends on several aspects including the vaccine. We will have to wait and see till the year-end, on how things will pan out.