Q.1. IDBI Federal Life has been focusing on the Bancassurance strategy crucially for the past few years. Do you think this strategy helped IDBI Federal in holding a steady position in the industry?
Over the past decade, 80% of our business came from the Bancassurance channels, that is IDBI Bank and Federal Bank, as they provided a low-cost, hygienic platform to reach out to customers and do business. However, over the last year or so, with LIC becoming the majority shareholder in IDBI Bank, we have seen a significant drop in the business from IDBI Bank as they are now required to sell LIC policies. This has dealt us a blow as the share from IDBI Bank amounted to around 50% of our overall business. To counter this, we have been focusing on incubating and growing our proprietary channels including agents, direct, online, group and brokers. We are also looking to further leverage our relationship with Federal Bank and hopefully grow it even more.
Q.2 How IDBI Federal is leveraging new technology to increase its distribution reach and provide better customer service?
We have consistently worked on enhancing customer experience and improving operational efficiency through extensive use of technology. Technology has quite comprehensively changed the way we operate, both at the front- and back-end. We have completely automated the sales process for our frontline sales team through our tablet-based application – ‘On the Go’. Last year, we launched the Pre-Issuance Verification of Customer app on our sales mobility tabs which has helped to reduce mis-selling as well as improve turnaround time of policy issuance. We also use an email BOT for responding to customer queries that has helped to reduce the turnaround time significantly. Through the use of data analytics and business intelligence, we have also sharpened and customized our communication to customers.
Q.3. Misselling has been causing damage to the growth of the insurance industry a lot. How do you handle mis-selling of policies?
There are two levels of awareness. One is being genuinely aware about life insurance, and the other is having a certain amount of awareness about life insurance along with some misconceptions about it. To prevent mis-selling of policies which is a serious issue facing our industry, life insurance companies need to step up and create far more awareness among consumers. We need to educate them about the necessity of life insurance as a crucial tool for financial planning and that every individual should have it. Recently in a positive step, the Life Insurance Council rolled out a 360-degree life insurance awareness campaign with the tagline ‘Sabse pehle life insurance’ which seeks to drive home the message that as one starts the journey of financial planning, investing in life insurance is the first step one should take.
At IDBI Federal, we take mis-selling of policies very seriously and have a Pre-Issuance Call process in place where we personally call every customer before the policy is issued to ensure that they have thoroughly understood the policy that they have purchased.
Q.4. How would you differentiate IDBI Federal from other players in the market?
For years, the life insurance industry has been selling products on the basis of fear and uncertainty. We took a conscious stance to break away from this approach and focus instead on health and fitness. Through our marathons and other grassroots sporting initiatives, we have been spreading a positive message which has helped us to break through the clutter and establish a deeper and stronger connection with consumers.
Q.5. Rapidly changing consumer behaviour is reshaping the consumer preference in the insurance industry. How is your company gearing up for this challenge?
We have adopted digital in a big way in order to serve our customers better. We use predictive analysis to segment customers so that we can customize our communication to customers based on their profiles. Going ahead, we hope to further sharpen our communication by using more data, analytics and artificial intelligence.
Q.6. Recently, IDBI Federal has organized Kolkata Marathon for 4th time. What was the theme behind associating with the event?
Our overarching organisational purpose is to empower people to create the life and lifestyle of their choice. We believe that in order to truly create the lifestyle one desires, one needs to focus on both, financial fitness and physical fitness. While we encourage people to improve their financial fitness through proper financial planning that protects and secures their future, we also place equal importance on physical fitness.
Over the last five years, we have been actively spreading the message of a fitter and healthier lifestyle through our four marathons in Mumbai, Delhi, Kolkata and Kochi as well as through our other sporting initiatives in the areas of badminton, cricket and football. The fourth edition of our Kolkata Full Marathon held in February 2020 was a tremendous success. Flagged off by our Brand Ambassador, Sachin Tendulkar, we saw close to 14,000 people from different walks of life participating across the various race categories.
Q.7. How has been your performance in 2019-20 and what is your target for the next financial year?
While 2019-20 has been a tough year for us due to the loss of business from IDBI Bank, we have worked to ramp up our proprietary channels in a major way. In 2020-21, we will look to be branch-light and distribution-heavy. Growing our proprietary channels will be a priority as well as further leveraging Federal Bank’s network.
While our topline growth has been impacted, we are continuing to do well on other parameters such as profitability, persistence, OPEX ratios, marketing, claim settlement, surrenders and risk mitigation which will be our focus in the next year as well.
Q.8. Any other future development you would like to share?
Our focus in the near future is going to be on incubating and growing our proprietary channels like agency, DST, online and group in a smart and aggressive manner. We will also be looking to further leverage digital to improve customer experience with the brand.
Q.9. Our journal, The Insurance Times, has entered into 40th year of publication? Would you like to convey any message to the readers?
The Insurance Times has been doing a wonderful job of providing informative and relevant news, articles and updates on the insurance sector over the past 40 years. I would like to encourage all the readers to continue supporting this publication and to keep increasing their knowledge and awareness about this sector. I wish The Insurance Times all the very best and hope it grows to new heights!
