R.M. Vishakha, MD & CEO, IndiaFirst Life Insurance, says the company is fully equipped to achieve the targeted growth in 2015-16
What were the growth indicators as of Q2, 2015-16?
R.M. Vishakha:In the first half of FY16, we have shown a 14% yoy growth in individual weighted received premium (WRP) business. This has been driven by increased branch productivity following a series of in-branch customer engagement activities. We have also been focusing on increasing the number of ‘specified persons’ within our corporate agents, thus increasing the on-ground sales force.
Which are the new products offered in 2015-16 and what has been the response?
We have launched 2 new products in FY16, the IndiaFirst Cash Back Plan, which is an individual plan designed to take care of a customer’s cash flow needs, and the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which is a group term product in line with the guidelines set by the PMO. We have seen an encouraging response to both the products. We have insured over 22 lakh lives under PMJJBY in a short span of 4 months.
We give a lot of importance to conceptualizing and developing products. We rely on market research and customer interviews to understand the needs of our customers and identify gaps. We then take a holistic product and process driven approach to developing products with innovative features that benefit the customer. We have over the years launched many innovative offerings such as our IndiaFirst Money Balance Plan, IndiaFirst CSC Shubhlabh Plan and more recently the IndiaFirst Cash Back Plan, with support from IRDAI.
How many policies have you issued in rural India as of Q2, 2015-16 and what is the yoy growth?
For the half yearly ending, we have issued 9321 rural policies with 29% penetration in total policies as against the IRDAI specified obligation of 18%. On a yoy basis, we have de-grown by 12%. We have a strong business through our regional rural bank tie-ups and we will continue to focus on growth in this segment. Further, our foray into PMJJBY is with the objective of furthering insurance penetration and ensuring more people have easy access to insurance.
What are the marketing, branding and promotional activities undertaken and planned for 2015-16?
The marketing and branding strategy of a company has to be aligned to the business objectives and the operating model of the company. We have a multi-channel distribution strategy and thus have a marketing strategy that caters to the needs of each channel.
We have a strong bancassurance business with 2 large public sector banks as our partners. We are focusing on the below the line (BTL) activities there. To support our agency business, we are planning to have focused city-based activities. Digital as a media is too big to be ignored and we are looking at innovative ways to use the medium to engage with customers.
How do you differ from other insurers in terms of pricing?
We as IndiaFirst Life have always put customers’ need and value in the forefront while striking a balance between all stakeholders. The technical expertise of our promoters along with strong distribution network has helped us keep costs low and pass the value to customers in terms of better benefits and prices.
We have consciously developed a holistic set of products that address the whole range of needs of our customers. We recognize that each customer is different, there are some that are well informed and able to select the right option for themselves, others who require guidance, and yet others who are not fully aware and educated about insurance. We approach each segment differently by either providing them with a range of products to choose from, or using our strong in-house and distributor sales force to offer guidance, or educating them and enabling them to make the right choice.
We follow a multi-channel distribution strategy and we have focused on having streamlined, efficient processes that keep costs low. Being a young company, we have the benefit of not having legacy and old economy processes. We are thus able to build and adapt to the changing times and leverage technological innovations that are transforming the way business is done.
We were amongst the first insurers to launch tab-based processes to seamlessly integrate our frontend and backend. We have over 80% of our policies sold through these tablets with customer interactive interfaces. We are also the first life insurer to launch a complete over the counter product, IndiaFirst CSC Shubhlabh Plan, where the customer can avail of an insurance policy within 3 minutes.
What are the major problems currently faced by the private sector insurance companies on the distribution front?
The biggest challenge that the industry faces is that life insurance products continue to be a push or ‘relationship-based sales’ product. It is important to find a solution to this or we will continue to be in a vicious cycle. Customers buy insurance without understanding the long-term nature, purpose and value of insurance, and due to this surrender or lapse policies, thus losing money. This keeps alive the perception that insurance is not a beneficial product. Thus, it becomes important to address the issues of customer reach, awareness and education.
At IndiaFirst we believe technological advancements provide a great opportunity to overcome these challenges. Technology can be leveraged to achieve low cost reach, and engage with customers to increase awareness and education levels.
What are the changes you have introduced on the information technology front in last one year?
IndiaFirst has always been at the forefront of technology implementation. We are currently in the process of revamping our CRM, LMS and other systems that will make sales management more effective. We have recently launched an Activity Management System, which will help our field force plan and conduct sales activities.
As you know, the company has an active presence in the online space. We are continuously improving our social media presence and are currently in the process of launching blogs focused on customer awareness and education. We are also implementing social and online marketing initiatives to further develop the digital channel and improve the current 2% contribution of digital channel policies to our total volume.
How do you view PMJJBY and the Pradhan Mantri Suraksha Bima Yojana initiatives?
We are one of the few private sector life insurers actively participating in the PMJJBY. We have launched this product for Bank of Baroda and Andhra Bank, our two bancassurance partners, and we have secured over 22 lakh lives. This scheme has perfect synergy with our objective of ‘securing lives, creating value’ and we are keen to continue promoting this. We face some challenges on account of stamp duty charges and are in talks with the government to see how they can support us to overcome the same.
What are the targets in 2015-16?
As an organization, IndiaFirst has a credible presence in the funds business and is amongst the top 5 players. As a strategy, we are continuing to consolidate our position in the funds business and focusing on growth in retail business. For FY16 we are targeting a 20% yoy growth in the retail business, and we have posted a 14% growth in the first half of the year. Over the medium to long term, we will continue to consolidate and build our presence in the retail segment through group or individual policies and have a growth rate in line with the industry.
How do you view raising the limit of FDI for insurance sector?
As companies grow, the capital requirement also increases, and when investments become substantial, there is a natural inclination of shareholders to want presence commensurate with the capital. India, in the present times, is a globally attractive destination, especially for investors with low deposit rates in their own countries. An increase in FDI limit allows the economy to attract and channel these funds from foreign investors. Thus, this move by the government should bring in the much-needed impetus to put insurance in the next level of growth.
All 3 of our promoters, Bank of Baroda, Andhra Bank and Legal & General continue to be committed and stay invested. Their support has been demonstrated through capital infusion of Rs150 crore in early October.
