Thursday, February 27, 2014
AEGON Religare Life Insurance (ARLI) launched its pan-India operations in July, 2008 following a multi-channel distribution strategy with a vision to help people plan their life better. The fulfillment of this vision is based upon having a complete product suite, providing customized advice and enhancing the overall customer experience. ARLI has launched a suite of products that are focused on providing the customer with the means to meeting their long-term financial goals. At the same time product development has been founded on the tenet of providing the customer with great value. ARLI products such as iTerm, iMaximize, Future Protect and Rising Star have been ranked among the best in terms of value and have attracted many external accolades.
Replying to Anil Mascarenhas of IIFL, Yateesh Srivastava says, “Insurance is just another financial instrument amongst many others. Do not evaluate insurance as an ‘either-or’ option but as an important component of your financial portfolio. If nothing else be adequately protected.”
Give us a broad overview of the Insurance industry. Brief us on how it has evolved over the years from a COO’s standpoint.
The Insurance Industry like many others is faced with ever changing technology that is impacting all elements of the business from sales to operations to underwriting to post-sales service. Today the advent of Social Media, Mobility Solutions, Leading Edge Analytics and Cloud-based solutions are having a profound impact making the insurance business a digital business.
Brief us on your company’s investment philosophy? Has it changed significantly in recent years?
Our company will continue to invest in talent and technology that will help us better serve the needs of our customers. As pioneers in the space of online life insurance over the last few years the focus on technology has sharpened.
There is a growing realization that life insurance needs to be positioned correctly as a financial instrument. The need to remain focused on selling life insurance for its core value of long-term savings and protection has become more prominent in the new environment. Your thoughts?
Life insurance is one of the options available to the consumers of today. Given the changing social fabric more and more consumers are understanding the need for having adequate protection. At the same time the volatile market conditions also make insurance a very good option for those looking for low-risk long-term savings.
To have a claim rejected is a harrowing experience. What is your advice to those who take insurance.
The key to having claims paid is adequate and complete disclosure. This means being truthful about lifestyle related information, family medical history and health related information. Even if the form is not being filled by the buyer, they should ensure that they read it to vet the information for accuracy. Remember full disclosure may result, on a few occasions, to a marginally higher premium but it also means a seamless claims experience.
What has been the response to the ‘free-look’ period. Any numbers or anecdotes you can share on this?
The free look period is a very good avenue for those buyers who discover on receipt of the policy that some parts of the policy terms and conditions have not been honestly shared with them or that the policy they have bought has been mis-sold. This is why it is important to read the policy document immediately upon receipt to verify the terms and conditions. Free look numbers are an indicator of the quality of business a company is doing.
In the current situation, what are the opportunities and challenges you see especially for online insurance?
I think that the world is turning increasingly digital and this is going to have a very strong impact on demand for online insurance products. The challenge will be in getting the right products that are simple to understand to customers. The approach to online insurance business has to be the same approach as taken by major e-commerce players.
Explain to us your distribution model. What is the percentage of business that gets done online?
We follow a multi-channel distribution model comprising of tied agency, third party distribution, salaried sales force and online. Today about 25-27% of our business comes from the online model in terms of volume.
You are responsible for the company’s product development too. Tell us what kind of products are policyholders seeking? If you were to design a dream-product, what would it be? Brief us about some of your existing products which are doing well.
First and foremost products need to be simple. Customers need to be able to easily fathom what they are ‘giving’ and what they are ‘getting’. I call this the ‘give-get’ equation. Simple products also significantly reduce the scope for mis-selling. My dream product would be one with absolutely no fine print. Our online term plan and some of our guaranteed return products are doing extremely well in the market.
How many customers do you have and how many do you add annually?
Till date we have over 300,000 customers. We are looking to add about 100,000 customers annually.
What is the vision for your company?
Our vision is to help people plan their life better. This means providing them with the right products at the right price.
What factors would increase appetite for insurance in India?
I think awareness about protection and protection products is an under exploited opportunity. A majority of our population is under-insured and there is a huge opportunity for growth there.
Will the elections have any impact on the industry? Why?
I think the elections will have an impact on the overall economic outlook and this will impact the industry. The fate of increase of FDI in Insurance will also probably be impacted by the election results.
Your view on the regulatory conditions?
The regulator is working to ensure the protection of policy holders and the industry has to work along with the regulator to ensure the same.
What books have you been recently reading. Any key takeaways?
Being a voracious reader and thanks to my Kindle, I read multiple books at the same time. I have of late been deeply impacted by ‘The One Thing’ and ‘Focus’ books that talk about the fallacy of multi-tasking.
What advice would you give those seeking an insurance policy?
Buy a product that is suited to your needs and goals. Understand the various products on offer and familiarize yourself with the terms and conditions. Review your proposal form carefully before submission as the form is the basis of the contract. Insurance is a long-term product so be willing to pay premiums for as long as required. Always inform your nominees about any insurance policy that you have bought.
Insurance is just another financial instrument amongst many others. Do not evaluate insurance as an ‘either-or’ option but as an important component of your financial portfolio. If nothing else be adequately protected.