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Turmoil Leads to Technology

In an exclusive chat Sanjay Radhakrishnan, CEO, Hero Insurance Broking shares the details about the business scenario & working with new-age insuretech companies:

Ravi Lalwani: How have covid and lockdown impacted the business of insurance brokers?

Sanjay Radhakrishnan: The pandemic has adversely affected individuals and businesses alike. The insurance sector had to go through considerable turmoil that impacted revenues generated and premium underwritten. Very few broking businesses comprehensively demonstrated their business continuity plans during this lockdown. We were amongst those select few who managed to do so, and this helped us continue our engagement with the customer. We developed specific technology platforms to automate and digitize our existing processes. We also introduced new lines of businesses that are intrinsically digital, to begin with. We also made use of the insuretech model effectively and efficiently.

The pandemic period also marked the launch of new channels of businesses for us including the POS channel and the recently introduced employee benefits channel. We also acquired a composite broker license from IRDA. This allowed us to do business in the specialty and reinsurance segments.

Ravi Lalwani: How have the insurance needs of your customers evolved over the last 1-2 years?

Sanjay Radhakrishnan: We are seeing a clear digital shift in the way customers are looking to buy insurance. Covid highlighted the need to have health insurance and life insurance. We understood this need quite early and launched our POS business which is completely digitally enabled. We also saw the insurance industry pick up some large losses during this period. Even corporates either had to take additional ‘Sum Insured’ through a separate insurance program or go for covid specific policies.

Ravi Lalwani: Which new types of insurance products are you focusing on?

Sanjay Radhakrishnan: With the acquisition of the composite insurance broking license from IRDA, we are now allowed to trade in all kinds of risks. As a part of the strategic business plan, we would be looking to approach the life, health, and motor insurance verticals in a phased manner through our multiple lines of business-like POS – small and medium-sized standardized products which are easier to understand and explain.

Large and customized insurance products are for our employer partners and their employees, encompassing the realms of health, life, and wellness products. We will pursue specialized complex and large consultancy-based solutions for projects like oil and gas, construction projects, Indian interest abroad, general aviation, airlines and drones, sports and media, life sciences, and cyber. We have specifically created reinsurance programs to help insurance companies.

Ravi Lalwani: Are you working with new-age insurance companies like Digit Insurance, Acko Insurance, Navi Insurance, etc? How is the experience different from the traditional companies?

Sanjay Radhakrishnan: We currently work with almost all the companies in the market, be it new-age or traditional. Different companies have expertise in different products and segments, which makes them unique. We aim to not differentiate amongst our partners in any way but to work with them so they can deliver the best outcomes for the customer in terms of coverage and price. In today’s day and age, nearly all insurance companies have digital capabilities. It is customer acquisition strategies that create a differentiating factor.

Ravi Lalwani: Insurance is becoming an increasingly data-intensive business? What is the approach to leverage data for insurance brokers?

Sanjay Radhakrishnan: We have been in this business for the last 15 years and have insured almost 100 million customers. We believe that this data is invaluable and our B2C business is reaching out to these customers digitally and the results have been extremely encouraging. All this is possible due to the analytics cell that we have created. We are now bringing in these same skills and tools to our corporate side of the business whether it is employee benefits or reinsurance. Our analytics capabilities are helping in creating a customer persona which helps us in identifying the needs of the customer. Since we have a presence in almost 2700 locations, the combination of data and geographical presence is one of its kind in the industry.

Ravi Lalwani: Which are the key technologies that have helped your organization to provide effective services to your customers during the pandemic?

Sanjay Radhakrishnan: Covid-19 has accelerated years of technology adoption in just a few months. Due to the lockdown, everyone became remote and distributed, which was a major concern considering that our industry is a largely human interaction-driven business. Keeping that in mind, we set out to modernize the core technology capabilities and infrastructure right at the beginning of the lockdown. We adopted a host of new technologies to enable all the stakeholders of the organization, especially the customers who were the most affected. Seve key technologies were introduced.

  1. Digital collaboration tools – These were separate for internal as well as external collaboration. Though generally accepted collaboration tools like Zoom and Microsoft Teams helped cross-functional teams collaborate across geographies, the challenge was to enable the customer, for which we brought in a state-of-the-art remote desktop management system known as Teamviewer. Teamviewer software has helped in guiding customers through key processes for which they are generally dependent on a dealership or an agent.
  2. Cloud – For an organization that is largely working remotely, cloud computing becomes an essential technology. To enable access to the systems which was already in place securely and collaboratively, we introduce the Microsoft Azure cloud which helped us strengthen our disaster recovery and business continuity procedures.
  3. Customer Self-Service Portal – When the entire nation and most of its physical services are at a standstill, enabling such physical services through digital self-service systems becomes ever more important. We saw this challenge as an opportunity and introduced various self-service options on the website including renewals, policy document provision, password reset, etc. We also introduced a completely digital policy buying portal that enables customers and POS agents alike to generate policies on their own.
  4. CRM System – To enable our Motor Insurance Service Provider (MISP) channel further, we introduced a completely digital CRM system to enable faster processing of renewals with a complete tracking mechanism in place.
  5. Enterprise & SME Platforms – As a part of the digitization and modernization initiative we recently introduced an enterprise portal for managing the corporate employee benefits programs for our employer partners and their employees. We’re also in the process of developing a self-serve portal for our SME partners to enable them to manage their policies with ease as well.
  6. Chatbot – To make the customer experience journey even more supportive, we went on to introduce a chatbot system in our B2C and POS self-service portal which is completely integrated with WhatsApp so that customers can easily access the various self-serve services along with customer support from the convenience of their mobile devices.
  7. Data Security – Keeping data security at the center of all the technology initiatives we execute within the organization’s systems, we strengthened the security infrastructure with the introduction of CDN-based access technology for all our portals to enable higher data integrity.

Ravi Lalwani: What are your perspective on climate change and the impact on insurance relating to life, health, business continuity, factory output, etc?

Sanjay Radhakrishnan: Even today, many parts of the insurance industry do not regard climate change as a significant issue. However, a certain amount of research and analysis has been performed in the field which has showcased it as a fundamental which will affect not only the nature of insurance risk but also public policy towards natural hazards. Additionally, these researchers expect climate change to have far-reaching impacts on asset management and in-house resource management because of international and domestic measures to reduce greenhouse gas emissions.

In parallel, there is a broader movement within the industry to understand and cope with the insurance impact of extreme events, because of the growing exposure to catastrophic losses, and the increase in their actual impact in recent decades. Finally, there is a recognition that environmental issues will have to feature more prominently on the management agenda in the future. The most obvious impact of climate change in the insurance sector will be the increase in insured property losses from extreme weather events. However, there are also significant implications for asset management as well as general issues relating to resource management. The second area where climate change will affect financial institutions relates to investment, particularly long-term asset management.

However, climate change will also have an impact on the overall life expectancy and health of the general populace. For example, rising temperatures and heatwaves can affect both mortality and morbidity, with follow-on impacts on hospital admission rates. Extreme weather events can lead to psychological distress and generate mental health-related claims. The spread of disease can be impacted by changing climate conditions. For example, sudden floods in areas that don’t usually see flooding could see a sudden rise in dengue cases. Poor air quality could result from bushfires and crop burning, and this could lead to respiratory distress and cardiac issues.

Mental stress on communities, such as those in agricultural areas that are experiencing drought. Over the longer term, when combined with global population growth, uncertainty around food security, its potential impact on diet and nutrition, and the implied potential for conflict, climate change could dramatically alter mortality rates. As with most risks, insurers and pension scheme managers must look beyond the superficial implications of climate change to identify several potential scenarios where their experience could be adversely affected.

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