The age of persuasion is over, CEO of Aegon Life Insurance says

Gone are the days when insurance companies had to persuade a customer to buy a policy, says Aegon Life Insurance Company CEO, Vineet Arora . Now people are aware of their needs and prefer to make their own choices. Today's customers are extremely knowledgeable and prefer to do their own research, Arora tells TOI in an interview.

Life insurance has always been thought of as a product needing a personal touch? How come the decision to do away with agents?

We are now 10 years in the business. At our peak, we were having about 7,000 insurance agents tied-up with us. We realised digital is the next era in insurance sales - it is the only way forward. Since June 2016, we have completely stopped selling via our agents and have focused on online sales. Today of the Rs 90 crore in premium we earned in 2017, as high as Rs 78 crore (80%) was from direct sales, including online sales. The rest was from corporate agency. We are yet to step into bancassurance though we've been in talks.

In terms of handling customer complaints does an all-digital model have some drawbacks? And have you reduced the number of branches with the doing-away of the agency force?

I would say we have had advantages because of going digital. We are now able to have a quicker turnaround in addressing complaints and lower instances of misselling. We have a 24/7 call centre that addresses customer needs and if need be our branch officers and representatives do visit customers in person.

As to our branch offices, yes we did consolidate our operations. From about 40-45 branches, we are now operating out of 28 branches in as many cities.

Since you have finished the 10-year benchmark, IRDAI has set any plans of an IPO?

No, we do not intend to go public. We are sufficiently capitalised for the time being.

Life insurance is often thought of as a product that needs persuasion and marketing skills. How does your digital interface handle that?

Today's customers are extremely knowledgeable and prefer to do their own research. A sizeable number of our customers come to us via web aggregators like Coverfox.com, policybazaar.com, policyadvisor.com. They've already done research on the riders, policy benefits, maturity claim bonus, of the policy.

Today we no longer have to persuade a customer to buy. They are aware of their needs and prefer to make their own choices. And it’s in our benefit when we can come up with good products that have a host of benefits.

What about know-your-customer? Isn't it a risk with regard to possibility of frauds to keep issuing policies purely based on online documentation?

I would say we've lowered the risks by going completely digital. It is the system, algorithms which decide the risk, which do the financial and health underwriting. Today, we are relying on CIBIL scores, your financial history and ability to pay premium from a neutral, unbiased view point -- technology.

Earlier, it used to take as anywhere from 7-15 days to issue a policy. Today a policy can be issued in 3-4 days. We have removed many pain points by going digital. For instance, to check your health, we realised people were scheduling their scan centre visits a week or 10 days later -- only because they need to be on an empty stomach for the tests. So we've now shifted to an anytime-anywhere simple blood test - which can be done by our representative in the convenience of your office or home.

Source: The Times Of India