Mr. Prakash Bikram Khatri has rich experience in both national and international banking. He started his career with Barclays Bank UK where he worked with teams across the globe mandated to provide world class cutting edge service to it’s clients with use of technology. In Nepal, he spent almost half a decade with Laxmi Bank leading large transformational projects related to business operations and technology. He has also served as a Director of NIC Asia Bank, one of the biggest brands in banking in Nepal and Nepal Life Insurance Company Limited, the leading name in life insurance business in Nepal. Mr. Khatri has been with JyotiLife since the inception of the company and has been leading the organization since the start.
Q. Can you give a brief Overview of the Life Insurance Industry in Nepal?
Nepal currently has 19 life insurance companies out of which 10 life insurers came into operation only 4 to 5 years back. The current market penetration as per Nepal Insurance Board (NIB) data is approximately 35% and increasing. Nepali market is purely dominated by participatory products where in addition to risk coverage, insurance is deemed as an investment product with returns at the time of maturity. Agents are the main distribution channel and more than 98% of the business booked is through the agency channel.
Q. Covid had impacted all industry segments worldwide. How do you perceive the impact of Covid-19 on the Life Insurance Industry in Nepal?
Covid 19, a pandemic, impacted all business sectors and life insurance surely wasn’t immune to this global crisis. However, despite the inherent risk when Covid 19 first started, insurers didn’t charge any extra premium to cover the risk. The reinsurance arrangement remained unchanged and insurers continued to underwrite policies at the same price. However, there was an additional documentation requirement related to Covid 19, its symptoms, exposure to infected people, etc. Although the death rate was lower in Nepal compared to other parts of the world, Covid 19 cases did impact the claim ratio of life insurers. In the case of Jyoti Life, in the last 3 years out of the total death claims received approximately 8% of the cases were cases of Covid 19 death. Now as we enter the year 2022 Covid 19 related deaths are being reported in a negligible amount.
Q. Apart from the traditional product Jyoti Life is focusing on Critical Benefit covers. Can you elaborate on the USP of Jyoti life and its products?
Jyoti Life since its inception has been focusing on living benefits rather than death benefits. Jyoti Life was also the first Nepali company to introduce the concept of Critical Illness by launching coverage for 11 Critical Illnesses for the amount of up to Rs. 10 lakhs. Based on the excellent feedback we received we further enhanced the product which now covers up to 35 Critical illnesses for the amount of Rs. 50 lakhs. The entire coverage amount is handed over to the policyholder upon diagnosis of the disease and the policyholder can then decide how and where he/she would like to get the treatment and fight the disease. In essence, through insurance, we are providing a financial support system to fight dreadful diseases to live. To date, Jyoti Life provides the best coverage in terms of diseases and amount in Nepal.
Life insurance mainly is viewed as a product whereby the policyholder pays an annual premium for a term as per the contract and funds in the form of Sum Assured are made available to the policyholder only after maturity or in case of loss. This modality is convenient and doesn’t cause financial strain for small-size policies or individuals with a certain level of guaranteed income monthly/yearly basis. However, for large-size policies and individuals who have fluctuating income levels, this can cause a financial strain as the funds are released only at maturity which may be deemed as an opportunity loss. Taking this consumer mindset and behavior into consideration, Jyoti Life Insurance Co. Ltd. designed and developed a unique product, Jyoti Three-20 DhanBaharJeevanBeema (Three-20). Three-20 is a Money Back plan under which the sum assured will be returned to the policyholder in THREE installments during the policy term as 33% in 1st Installment, 33% in 2nd installment, and 34% plus bonus in 3rd/the last installment. After the policy term, will automatically continue for an extended period of 20 years and 5% of the sum assured will be paid annually during this period. Hence the name of Three-20. With a guaranteed return of 100% of the Sum Assured within the term period + Bonus and an additional 5 x 20 = 100%, making a total of 200% (excluding bonus), this plan is targeted for those who need to fulfill their financial obligation at a different stage of life and also requires regular source of income after a certain period or for the retirement period.
Q. With technology driving the change in the life insurance industry, how do you see your company coping with advancements, digitalization, and product innovation?
Technology and innovation have been the key driver at Jyoti Life. In the past, various regulatory requirements which could have only been achieved through a manual paper-based process have been relaxed by the regulator. We are now able to execute several processes digitally such as first premium, renewal payment, customer forms submission, etc. The core system handles all the core operations of the business. However, to bring in innovation and technological edge, we are developing various in-house systems which shall connect various internal departments, manage the business process and workflow and allow us to capture the Turn Around Time (TAT).
I am confident that JyotiLife is well-positioned to cope with technological advancements or even be the trendsetter. Digitalization I feel is not only about buying tools and technology. It’s part of work culture, work ethos. At Jyoti Life, everyone, the Board of Directors, Executives, Head of Department, and the entire team are constantly looking at ways of doing things better. We, therefore, do not have the challenge of resistance to change when it comes to technology. We have been constantly re-engineering our processes, evolving and innovating.
Q. The ultimate goal of a Life Insurance Company is to pay insurance claims on time without any hassles. What is your claims philosophy and what is your claim settlement ratio?
While business growth is very important as it drives the entire balance sheet, without a robust claims handling mechanism, the business will suffer. At Jyoti Life our philosophy is as follows:
“We understand the value of the security and emotions of our valued customers. Therefore, we explicitly express our prime concern to prove that Jyoti Life is always with our customers at the time of their need. We look at life insurance from the customer’s perspective and are committed to payout every valid claim promptly after submission of all necessary documents.”
Every claim case is reviewed in the most professional, ethical, and prudent manner and the outcome is determined by the process which is governed by our claims policy. We at JyotiLife never look at the size of the policy or claims paid for the month or any financial indicator during the claims process. Claims payout is a commitment that the company had made during the underwriting process and as long as claim cases are eligible for payout the claim is settled at the earliest while adhering to regulatory requirements, our claims policy, and other terms and conditions as per the policy document. We currently maintain a claim settlement ratio of more than 90%.
