January 2020 | 914 words | 4-minute read
The window of opportunity for demographic dividend in India is open for five decades, from 2005-06 to 2055-56 — longer than any other country in the world.
Presently, India’s working population is 750 million-strong. This, combined with an increase in life expectancy, means that by 2050, a majority of working people today will be above 60 and will have a life expectancy of 78 years when they retire.
Thus, Indians need protection from dual risks — that of dying too early, or longevity. This does not reflect in the data.
Here are some figures. More than 950 million people do not have life insurance (LI). Further, India has a protection gap of 92 percent. This implies that for every Rs. 100 of protection required, only Rs. 8 has been invested. Bridging this gap will lead to greater financial security for protected Indians.
Growing with purpose
Due to these factors, the life insurance sector in India holds a lot of promise and well-established insurers are growing rapidly. Tata AIA is the fastest growing life insurer (four-year CAGR of 76 percent till FY19) in India and is presently amongst the top five private life insurers — a significant rise from the 17th position in 2016.
Strength of distribution is a key differentiator for a life insurer. In an industry dominated by bank-promoted life insurers who inherit the promoter bank’s customer base, we have been able to carve a niche guided by our vision to be ‘the pre-eminent protection provider: inspiring dreams, enabling healthier and happier lives’.
This vision was crafted three years ago with the underlying purpose of serving society through Tata AIA Life’s core proposition.
Blueprint for success
Backed by shareholders, we turned the commonly-held belief that only bank-promoted private insurers could be successful in India, on its head. We did this by focusing on four key areas:
Emphasis on protection products: Our primary focus is on increasing penetration of protection products (commonly referred to as term insurance). Term insurance is the essence of life insurance and the most affordable. In our endeavour to bridge the protection gap, we find it important to reach as many consumers as possible and ensure that each one gets the full insurance cover required.
Developing people to become leaders: Our goal of reaching as many customers as possible entails that our employees be fully committed to the cause. People are at the core of our operations; by leveraging shareholder experience, we offer them world class development opportunities. Our engagement score is 81 for the past two years (the BFSI average score is 78, Indian LI industry average is 72), and we are the prevailing Aon Best Employers for the fourth year in a row.
Multi-channel presence: Our multi-channel strategy — which includes direct proprietary sales, banks, brokers and web aggregators – offers our people varied growth opportunities. Further, it ensures a diversified portfolio with an existing in-force base of almost 1.5 million consumers. Through a productive agent force and corporate tie-ups with leading banks like HDFC Bank, Central Bank of India and Citibank, we extend protection to a large section of customers.
Digitisation is critical. Some of the key initiatives include real-time mobile sales management; chatbots for supporting sales; bank KYC; and credit bureau partnerships, which make it easy for consumers to share information; as well as automated underwriting, using all possible data sources, for a more accurate risk assessment. Using these measures, we can provide medical checkup waivers (an essential part of the policy issuance process) and expedite processing of policies.
Consumer centricity: Technology has enabled us to track how consumers perceive our services through real-time NPS (net promoter score). We listen deeply to evolve and serve our consumers better.
Our claims settlement ratio of 99.07 percent (as of FY19) gives our consumers confidence that they have placed their trust in the best. All claim settlements are handed over with a personal visit by our employees, and we plant a tree in-memoriam for each completed settlement.
This focus has allowed us to achieve early success in a holistic manner, guided by the principles laid down by the Tata Business Excellence framework. Being accorded the title of ‘Emerging Industry Leader’ in the latest completed assessment, gives us the confidence to aspire to industry leadership.
Looking to the future
Going forward, we will blend our focus on protection products with being consumer-centric, to introduce a shared value proposition called ‘Vitality’. The health and wellness of our consumers is of utmost importance to us. Through ‘Vitality’ we will partner with consumers to encourage healthier living that feeds back into dynamic pricing of policies, thereby creating a positive loop.
As consumers interact closely with us, we will sense their needs and offer them personalised pre-approved propositions through predictive analytics.
Further, by planting a tree for every term (protection) policy sold, our purpose of protecting individual lives and securing the future of their families will expand to protecting our environment and securing the future of generations yet to come.
For us, this is sustainable business practice at its best – where the interests of society, business and individuals come together to work towards the common goal of protection. This is our endeavour to give back to society many times over.
The author, Rishi Srivastava, is the chief executive officer and managing director of Tata AIA Life, and has over two decades’ experience in finance and insurance. His focus on simplified offerings and on addressing the multiple needs of customers led to innovation in products and a differentiated marketing strategy.