November 2020 | 1029 words | 4-minute read
Aspiring to be a data-driven intelligent organisation, Tata AIG embarked on its digital journey much before the outbreak of the pandemic.
When the virus-enforced lockdown went into effect earlier this year, Tata AIG was in a good position to respond with agility. At the heart of this digital transformation is the company’s strategic leverage of data and insights to deliver superior and convenient experiences.
Data-driven customer retention
Acquiring a new customer is far more expensive than retaining an existing one, or so goes the famous marketing adage. And, certainly, spray and pray isn’t a smart way to retain or market to new customers. It’s here that Tata AIG’s customer retention propensity model comes in.
“Using the model has led to over 80% improvement in the conversion rate for our digital campaigns,” says Anith Paul, vice president – Retention. The model has helped Tata AIG develop marketing tactics smartly and its impact is visible. The company is now focusing on continuous improvement as the model ‘learns’ more and more through analysing data and delivers more accurate results.
Over the past two-three years, Tata AIG studied several variables such as premium payment mode, repeat business, premium amount, discounts, claims, insurance value, and CIBIL status to glean insights. The company collated, cleansed, and performed exploratory analysis on the data to develop their unique perspectives on it.
"Using the model has led to over 80% improvement in the conversion rate for our digital campaigns.”
—Anith Paul, vice president – Retention, Tata AIG
The process was not a siloed activity. In fact, the findings were shared with all stakeholders and feedback sought, to adopt an experimentation approach. “We also had several cases where the marketing teams and agencies said that certain results do not sit right intuitively. This led to further iterations, learning, and experimentation,” states Mr Paul.
For example, some customers were perfectly comfortable with online transactions, while others required a call or ‘soft reminders’ to nudge them into renewing their policies on time. The model also identified customers who were most likely to exit, so strategies were created to persuade them to stay on.
The customer retention model has made life easier for customer-facing staff including telecallers and agents. Tata AIG can now share information and insights based on the model to create more personalised scripts for the calls. For agents, it has reduced the customer-retention burden.
Can you imagine paying your car insurance premium based on how much and how well you drive? Well, it is a distinct possibility with Tata AIG’s telematics solution.
The solution called ‘Auto Safe’ is a GPS-enabled chip on a device that is installed in your car. It measures the distance you travel in a year; your driving style, including braking and acceleration rates; and more. At present, the product — Usage Based Insurance (UBI) Private Car Policy — is sold through select agents in Ahmedabad, Pune, Mumbai and Delhi for limited car models. The chip, installed by a trained agent, provides an insight into your driving style on the accompanying mobile app and device.
“In the next phase,” says Navneet Bhatt, vice president & head – Auto & Actuarial Analytics, “Tata AIG is working on more advanced features that calculate the premium pricing based on your driving behaviour and prices the renewal premium accordingly.”
Launched in June 2020, under the Insurance Regulatory and Development Authority of India’s (IRDAI) regulatory sandbox, the flexible package — as against the conventional year-long policies — enables policy holders to choose between slabs based on distance travelled. Going ahead, Tata AIG intends to launch few more products under IRDAI’s regulatory sandbox.
In the general insurance segment, a risk engineer inspects the business facility of a prospect or existing customer for risk assessment purposes. For this, the engineer often has to travel to remote locations, where most factories are located, to conduct inspections and enable underwriters to provide a premium quote to the customer.
Time, however, will not expand to meet the needs of a growing market. Besides, experienced risk engineers can only do a finite number of assessments in a given timeframe because the job often involves extensive travelling.
Sudhir Khare, who heads the Property and Energy vertical for Tata AIG, narrates the story of a newly commissioned chemical plant at Dahej in Gujarat, India, which had to be assessed during the lockdown. Instead of travelling to Dahej, Tata AIG’s risk engineer worked from home and used a mobile app exclusively developed for digital inspection, to capture visuals from the factory site, feed in critical data, and record conversations with onsite engineers and managers.
“In less than 24 hours, we were able to close the business and receive the premium cheque. Such instances reinforce our belief in the potential of digital innovations. In the longer term, this will create an impact on several aspects — costs, turnaround time, transparency, and efficiency,” says Mr Khare.
The mobile app not only captures photos and videos, but also generates customised reports which can be shared immediately with the customer. To reduce the possibility of fraud, the app has built-in geo-location tagging which ensures that the data captured is from the desired location. All data is stored on the cloud. If a claim arises due to fire or any other accident, Tata AIG can access the information instantly to better evaluate the claim. The data also serves as a knowledge repository, which is useful for ‘training’ the AI models.
To implement the solution Tata AIG followed an agile process, where weekly releases were tested with the field teams even as they were being developed. This helped users a great deal in making the solution really easy-to-use with minimal guidance.
Tata AIG now is looking at making this solution available to agents, brokers and other third parties in their ecosystem, as well as to customers who might like to do a self-assessment before renewal.
As the insurance industry continues to evolve at a rapid pace, Tata AIG’s investments in leveraging data and artificial intelligence to drive smarter business decisions will place it ahead of the curve. As the insurance industry pivots, Tata AIG aims to be ready not only to capture opportunities but also to lead with industry-first solutions.