Future Generali India Insurance Company already has a retail focus but it wants to enhance this. It’s a challenge and the company wants to take this up, says its MD and CEO K.G. Krishnamoorthy Rao:
K G Krishnamoorthy Rao
Future General India Insurance Company has a pronounced focus on the retail segment unlike many other private insurance companies. “Today, as much as 65% of our business is in the retail segment now and we wish to increase this to 70% in 2016-17. We want to focus more on this segment as I feel there are several areas in this segment that had remained unattended in the past. I believe with product innovation and better channel management, we can penetrate the hitherto unattended segments of population,” says K.G. Krishnamoorthy Rao, MD and CEO.
The joint venture between Italy’s Generali and the Future group of India, which started operations in 2008, today offers health insurance, motor insurance, crop insurance, travel insurance, home insurance and micro insurance products with gross written premium of around Rs 1500 crore, which is growing at 10% every year.
Rao says in the last 15 years, the insurance sector in India has indeed made a big difference. He recounts how in earlier days, LIC and the four government-owned general insurance companies had a virtual monopoly both in life insurance and general insurance and how this has changed now. “While LIC continues to have its spell on the life insurance segment, as much as 50% of the total general insurance business is now being handled by private insurers in the country. The general insurance business in India is currently an Rs86,000 crore premium (April 2015 to February 2016) industry and is growing at a healthy rate of 13%,” he says.
BUSINESS OPPORTUNITY
He talks about the huge business opportunity that is insurance business and points out to statistics:
- The country currently accounts for less than 1.5% of the world’s total insurance premiums and about 2% of the world’s life insurance premiums despite being the second most populous nation.
- It is considered as the 15th largest insurance market in the world in terms of premium volume, and has the potential to grow exponentially in the coming years.
- The insurable population in the country will touch 750 million in 2020.
MOTOR INSURANCE
He reveals that Future Generali’s major products are in the motor insurance sector, which accounts for as much as 50% of its total business. This is followed by health insurance. “We have a definite focus on motor insurance,” says Rao, adding: “And that is why as much as 50% of our business is from this segment. We have unique products here. For example our zero depreciation policies. These policies offer full claim without any depreciation on the value of parts replaced with an admissible claim under the comprehensive package policy. It also covers theft or loss of keys, loss of personal belongings, tyre damage, no claim bonus protection, engine protector and when the car is declared as a total loss by us in the event of a claim under the policy, we will pay the financial shortfall between the amount you will receive from the insurance policy and the purchase price of the car, as confirmed in the invoice of sale. Besides, there is a special provision for roadside assistance like towing the car, assisted services in cases you lock or lose your keys, arrange alternative transportation in case of breakdowns, and arranging for an automobile technician to conduct onsite repairs in case your car breaks down due to electrical, mechanical failure or due to an accident. We also offer cashless claim processing.”
The company ensures that in the case of an accident or other eventuality, the surveyor visits the spot instantaneously and carries out inspection. The report is uploaded on to the central server, when the processing of the claim starts immediately. Usually the settlement is done within 15 days. In the case of cashless claims the TAT is just two to three days for approval of claim, however the delivery of the vehicle would depend upon the time taken for repair by the workshop.
“The idea is that with some minor add-on payments and little tweaking of the products, our customers get the benefit of convenience and they are not put to face difficulties in the settlement. The customer can reach us online and track the progress of the claim settlement too,” says Rao.
NO TPA
In the health insurance segment too, the company has been able to bring about perceptible changes. For example, it has eliminated the layer of TPAs, which has been somewhat an irritant for the customers who take medical insurance. “What we have done instead is that we have created a team comprising medical professionals and insurance specialists which goes through requests for hospital admissions, claims and other related issues and offers instant approvals. I can say a cashless claims approval is given in just one hour. We have received excellent feedback from customers about this,” says Rao.
He adds: “In health insurance too, we offer specialized products. For example, we have Future HospiCash, which is a plan that provides cash benefit in case of hospitalization to avoid drain on one’s savings. In the event of hospitalization even if one has a standard Mediclaim policy, he may have to make some ‘out of pocket’ expenditure like food, conveyance etc. HospiCash will pay a fixed benefit amount for each day of hospitalization to take care of such incidental expenses and thus reduce out of pocket expenditure.”
The retail focus is helping the company because Rao says this segment has been showing a yearly growth of 10% to 11% in the last three years whereas group schemes offered to corporate entities have seen average growth and the premiums are often underquoted.
RURAL INSURANCE
The company has recently introduced crop insurance, as part of its rural insurance program, in states like Bihar, UP, Rajasthan and Haryana, where crop loss on account of natural calamities like drought and floods are high. “We have tie-ups with MFIs for covering their customers under different rural insurance products depending on the customer segment,” says Rao, adding, “and we have received encouraging response. In addition, we offer cattle livestock insurance, Pradhan Mantri Suraksha Bima Yojana, Sampoorna Suraksha and Janata Personal Accident policies for the rural population.”
Sampoorna Suraksha is a micro insurance product providing protection to the insured and their business for eventualities like hospitalization, cart protection and liability, robbery, farm produce loss or damage, loss or damage of pump sets and damage or loss of cycles. The product is offered in association with NGOs.
“I believe the scope for rural insurance is huge and it is a market that has remained almost untouched for years. Even now, there are very few insurance companies that have really made a rural foray. One of the inhibiting factors that make rural folk shy away from insurance is the lack of awareness. While opening a bank account is among the priorities, insurance is still not,” says Rao.
“So, we are designing products that the rural people can afford to buy, say at a premium amount as low as Rs 20 or Rs 30.”
Offering protection to one’s most important asset – Home – is another priority for the company. It is preparing to have tie-ups with large housing complexes to offer this policy on a long term – say 15 to 20 years. Individual apartment owners can obtain this policy and protect themselves against losses sustained in fire/flood or allied perils. It intends to offer package deals for residents of housing colonies in this regard.
Rao maintains that the insurance sector in India is marked by large scale delinquency. “People obtain policies in the first instance and fail to renew them. I will say 10% to 15% of insured people in the country in general fail to renew their policies right after the first year.”
Future Generali has substantial online capabilities. Its travel, health and auto policies can be obtained online. “We understand the needs of the new generation and we are ready to offer products of any nature online. Of course, renewals of any policy can now be done online,” says Rao.
CARING CUSTOMERS
He speaks about caring for the company’s customers: “You may realize that we do not believe in excessive advertising and publicity through various media. If we are able to offer good service to our customers at the right time and in the right manner that gives us the right exposure. We believe the customer is our brand ambassador. We ensure that each of our customers will have a unique experience while dealing with us. We encourage our customer service executives to directly interact with the customers and solve their issues. In fact, handling customers effectively and to their delight is part of our training program for all. We also assess the level of service offered at various touchpoints. For example, we carry out what is described as ‘mysterious audits’ where our teams inconspicuously visit branches and other touchpoints and not only interact with customers but the staff at these branches to understand firsthand how the customer is treated.”
Agents constitute the company’s major channel. It is also into bancassurance but because of its late entry, it was at a disadvantage as by the time it started our operations most of the banks have already finalized their arrangements. “So, we could get only few private banks and some leading cooperative banks to be our partners. Now that IRDA as part of its new guidelines is permitting banks to tie up with a maximum of nine insurers from the three segments, we are in talks with major banks for alliances. As of now 6% of our business comes from this channel,” says Rao.
Future Generali has a CIS in place – what it describes as Central Policy System. “Our policy issuance, renewals and claims settlement are all automated. Our field staff as well as agents are empowered to the extent that they can in many cases issue policies on the spot,” points out Rao.
