SUD Life has launched various mobile applications including employee chatbot to empower & enable field staff for lead generation, training, attendance management and proposal logging in:
Star Union Dai-ichi Life Insurance (SUD Life), a joint venture between two of India’s leading public sector banks, Bank of India and Union Bank of India, and Dai-ichi Life, Japan, is one of the fastest growing insurance companies, which is embarking upon digital journey more effectively and aggressively. Ganesh Muruga, Exec VP & Head Sales at SUD Life, paints the picture of progress with the help of digital.
Mehul Dani: What digital and online measures have contributed to the growth in customers of your company in the last FY? What are the changing trends in customers’ profile resulting from increased online engagement?
Ganesh Muruga: We have enabled digital banca as well as direct buy online journeys during FY22 only. However, within a short time we are seeing sizeable traction from online business as well. During FY2022, our customer base has grown 28% y/y vis-à-vis FY21. Since inception, new customers have grown at a CAGR of 19%. So far, our customer onboarding was happening through banca only channels – ie, offline. We aim to further grow this base at an accelerated rate.
There is an uptick of 67% in share of business from urban geographies rose to 67% compared to 63% the year ago. Crucially, the share of business from female customers has increased sharply – from 25% in FY18 to 36% in FY22. The share of business amongst different occupations – salaried, business, professional – remains stable during the last 5 years. Going forward, we expect some of the post-covid trends to continue. Accordingly, there may be more online customers and more demand from women customers.
How has your company introduced an element of digital in distribution channels to achieve higher business growth?
During FY22, our company transitioned from banca only to multi-channel distribution. We have commenced digital, agency, RRB, cross-sell, corporate agency and broking channels for proliferating business scale and diversifying distribution footprint. Diversified distribution, being increasingly aided by digital measures, coupled with the right product mix has enabled SUD Life to increase penetration. Increasing interest in life insurance amongst people towards securing life’s certainties is also aiding growth. SUD Life’s total new business premium (NBP) reported stellar performance at Rs19.26 bn, up 66% y/y. The annual claim settlement has scored an improvement of 253.5%. SUD Life has witnessed 20% growth in renewal premiums from Rs18.35 bn in FY21 to 22.11 billion in FY22. In the 12-month period ending in March, AUM grew from to Rs150.52 bn on y/y basis registering a growth of 24%.
What notable results have new channels and processes brought in last year?
Until FY21, we had no direct distribution. We have now adopted a multi-channel approach with special focus on digital channels. Accordingly, new products are being launched for distribution through these channels. We have introduced 2 new notable products – Century Royale and e-Wealth Royale in savings and investments category respectively, for sales through direct channels. These are easy to understand & low-cost products wherein benefit of direct channel distribution is passed on to the customers in form of lower administration costs, and hence, yield higher returns for them.
The buy-online journey was made responsive, meaning you enjoy the same experience, seamlessly, on any electronic device, be it desktop, laptop, mobile or tab. A new visually-rich design scheme, better usability, structured content and robust backend make online policy buying a pleasure. Integrated features such as 3rd party API integrations like Aadhaar Based Authentication (EKYC), Optical Character Recognition (OCR), validating bank account by Rs1 transaction (Penny Drop), PAN validation, etc, makes the paperless journey true to its nature.
Long insurance forms were replaced with pre-filled forms that included all of the accessible information making this is paperless journey. We have been felicitated with ‘Best eKYC User Agency’ (KUA) declared by UIDAI western region office.
Specifically for digital bancassurance, group CASA & credit life policies have also been simplified. Moreover, group CASA does not require any income proof. Within bancassurance, until now, sales journeys would be completed by branch officers on core banking platforms on behalf of customers. This initiative will empower customer to complete their own journeys on one side and improve productivity of branch officers on the other side.
More than 70% cases can now be issued in less than 3 days owing to above process improvements. Overall, conversion ratios have significantly improved as well.
What is the impact of digital initiatives like mobile apps, digital platforms, chatbot etc, at your company on customer onboarding, products, etc?
We at SUD realise that the new battlefield for customer acquisition lies on creating customer experience rather than low pricing. We have initiated a host of applications, platforms, chatbots to improve both customer and employee experience. All these initiatives are centred around improving responsiveness, speed, better compliance, acquire & retain good talent among others. Broadly, these have significantly improved customer conversion & average TAT for policy issuance.
We can now issue more than 80% policies within 1 day. We are gradually moving to instant issuance of policy. Owing to channel specific underwriting, medical digitization, AI-ML risk management models, our policy conversion rates have improved from 89% in FY21 to 94% in FY23. Overall, our claims settlement has increased from 91% in FY21 to 97% in FY22.
Which electronic gadgets are deployed for field staff, agents, for providing doorstep services to the customers?
We have launched various mobile applications including employee chatbot to empower & enable our field staff for lead generation, training, attendance management, proposal logging in. All these applications have made life easy for sales officers as these applications help them remain more informed, deliver more accurate information to customers, real time tracking of business for regional sales managers among others.
We also introduced the employee chatbot for direct contact between HO & field staff. This helped in better dissemination of campaigns information, incentive programs, accessing hyper-personalised product pitches. Employees can access them at their ease whenever & wherever they want. This helped in improving employee productivity, overall morale and eventually better retention. These initiatives have led to better employee productivity & engagement.
What is your observation about digital adoption by different customer segments in the wake of covid? How do you propose to cater to these segments online, digitally in future?
There was a steep decline in new customer acquisition immediately post covid. Renewals however, have improved significantly from 74% in FY20 to 80% in FY2022. This is primarily credited to increased awareness of life insurance products post covid due to online means. More and more customers are comfortable with digital communications, video calls, WhatsApp even in rural areas.
We realized that customers are increasingly becoming more and more comfortable with digital channels. Accordingly, we at SUD are working at breakneck speed to be present, where our customers are. We are enabling digital buy journeys across bancassurance, website, WhatsApp, web-aggregators and online brokers. This coupled with video product pitches, hyper-personalized communications and easy payment options will help increase business across digital channels.
What new tech innovations and initiatives your company is planning for overall business growth, in this financial year?
The biggest task is that SUD is expecting 4-5% business from across non-banca channels. These include both online & offline channels, notable amongst being the individual agency.
Moreover, SUD proposes to launch – Prosperity – a gamified platform, a one of its kind life advisor, providing proven, timely and structured guidance on enhancing health and wealth of lives to users’ fingertips. The app enables a 3-click sales workflow for sales officers and 1 minute policy buying journey for customers.
The goal is to provide a comprehensive offering to customers coupled with best in class customer experience, that will help us create a sticky customer base. Moreover, our intelligence unit is continuously working to improve AI-ML models, to help us understand customers better and cross-sell to them with the right product at the right time.
What are your IT & digital plans for the current FY?
As per the understanding of our joint venture, we are allowed to use branches of our investor companies which are huge in volume. Secondly, the company has signed MOU with third party service provider to penetrate its services to make ‘Bharat’ secured. Along with this, the company has also created unique digital platform to reach bottom of the pyramid.
Accordingly, the bank branches & increased penetration within those branches is one of the major factors which could fuel our growth trajectory in both long term and short term.
One of the notable initiatives in the current year to increase penetration within banca includes verticalization of BOI & UBI teams. From head office to field staff level (FLS), we now have separate teams for both these partners for a more focused approach. FLS strength has been increased by 20-25%. For better focus, we have increased the number of bank branches with SUD sales officers and number of sales officers per bank branch. Some of the applications such as chatbots have been extended to branch staff for their training and information dissemination.