Re-imagining the Insurance Industry

To understand the role and need for insurance in the present day, Mr. Dhruv Katyal, Partner and COO, ScaleneWorks invites Mr. Ashish K Srivastava for a webinar. Mr. Ashish, CEO and Managing Director of PNB MetLife has extensive experience of 25 years, working across industries and dynamic cultures. Prior to joining PNB MetLife, he has held senior leadership positions at Coca Cola. HSBC, and TATA Group.

Through the webinar, the two discussed the changing roles of insurance, customer service values, digitization, and the pandemic stricken economy.

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More than 90% of the Indian population cannot afford fundamental health care. This concern reached an alarming rate when migrant workers tried to travel back to their hometowns during a national COVID19 lockdown. Several workers lost their lives while travelling by road due to fatigue, injuries and road accidents.

In this pandemic, our health plays a pivotal role in curbing the effects of the virus, which is why Indians are in need of a good life and health insurance that can benefit them as well as their families.

Fundamental changes in insurances post COVID era

Mr. Ashish believes that there is a necessity for insurance in India. In 2015, the central government of India launched the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a life insurance scheme designed for the growth of low-income and poor sections of society.

Another initiative taken by the government is Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY), a health assurance scheme from the government’s National Health Policy that provides free health coverage to the 40% of the poor population.

Indian Government has launched a few insurance schemes that people are unaware of. He says that there needs to be more awareness about nominal rate schemes for life and health insurances that can be purchased by the lower sections of society. The government and the regulators must ensure that they are informing the public about the availability of such schemes.

He further adds, many Indians have started investing in insurance policies during the COVID19 pandemic. In a study conducted by PNB MetLife across 6 countries, the following results were found:

1. Insurances are emerging as a necessity in everyone’s financial bouquet. People want insurances to cover the bouquet of products that they possess.
2. 79% of those who have been exposed to or witness the effects of COVID19 need additional insurance covers today than the pre-COVID19 times.
3. The notion that insurance is a face to face transaction is changing. Customers want to buy insurance from companies and portals that have a strong digital presence. They want to experience a seamless journey while buying insurances.

The 3 Ds Model at PNB MetLife

With the rapid growth in digitalisation, insurance companies have had to keep up with their customer service and policy sales online. Mr. Ashish says that the insurance sector must reimagine itself and introduce new changes. To deal with the changing times, his company follows the 3 Ds of PNB MetLife.

1. Digitise – They believe that every customer must have a seamless journey while purchasing insurances online. The company focuses on being as efficient as possible since 80% of its sales take place online.
2. Data – The sheer size of data collected by the company is enormous. When a policy buyer would share information with PNB MetLife, the data would be stored safely by a third party company. Mr. Ashish says that this data was unused at the time but now, they are using it for customer segmentation purposes. This segmentation helps their company target specific groups who are interested in purchasing insurances.
3. Disruption – The company believes in disruption-free communication with their customers. Hence, they have designed India’s first-ever Artificial Intelligence-based customer service app, khUshi that allows users to have 24/7 communication with the virtual assistant without any disruptions.

Building trust amongst customers

Mr. Ashish says that “As we become digitised, we also become more transparent.” PNB MetLife introduced a service called Claim Assured which provides non-early death claims within 24hrs. This service has been very helpful to customers who have lost family members during the virus outbreak. Customers have been extremely pleased with the company’s promptness as several of them have received their claims within the time allocation by just communicating through emails. He thinks that these are small steps in which companies can build trust with their customers.

Earlier, the company was maintaining a Transaction Net Promoter Scores (TNPS) which was a survey given to customers. TNPS helped in improving the company’s customer relations and services. To further build a stronger customer relation, PNB MetLife adopted a new survey system called Relation Net Promoter Scores (RNPS). This survey is harder to monitor and achieve but the company is willing to make their customer service as effective as possible because they believe that this will increase trust and brand loyalty.

Role of Regulators

Regulators play a huge role in the financial sector, especially during such difficult times.

Commenting on the same, Mr. Ashish talks about its impact on the current scenario.

He says the regulators have started to engage more with industries. They are listening to the demands of businesses and implementing necessary actions. For example, there have been discussions of increasing Foreign Direct Investments (FDIs) since it will bring in more revenue, increase employment, and improve capital flow. There have also been discussions about raising life insurance cap to 74% from 49%.

The Sandbox initiative introduced by regulators allows banks and companies to try new innovative experiments. With an idea, businesses are able to create new products and services that normally are not approved by regulators. Singapore also follows the Regulatory Sandbox which has led to several new and innovative projects by Singaporean companies.

The current financial sector

Most of the private consumption is driven by the 11 thousand NBFCs in India. The lower section of society depends on NBFC for 4 wheelers, 2 wheelers and even housing loans. Mr. Ashish says that 55% to 60% of the GDP movement is from the private consumption of NBFCs. This issue started before the pandemic but continues to be a problem in the economy. But the government is taking actions, for example, they have taken steps to bring back liquidity in the market after the liquidity crisis.

When asked about how India can cut down its cost of capital rate, which is usually 15%, he says that the government, regulators, and businesses will have to “reimagine” themselves. With the help of equity fusion, collateral-free loans, and disallowing global tenders, MSME sectors will face lesser competition from foreign corporations which will, in turn, reduce the cost of capital rates.

Moving Forward

In the coming months and years, skills such as wealth, risk and credit management will be required. According to Mr. Ashish, these skills will help evaluate how industries can move forward post-COVID era.

Mr Ashish asks people to keep faith during these tough times and follow the “All is well” concept, that he strongly believes in and uses to motivate his teams as well.