- 2 years ago
#OutlookMoney Insurance Summit 2nd edition | watch our non-life Insurance panel sharing their key insights on the rise of bite-sized #Insurance and their #Utility
Anand Roy, Managing Director at Star Health and Allied Insurance Co. Ltd.
Bhargav Dasgupta, Managing Director & CEO, ICICI Lombard General Insurance Co. Ltd.
Tapan Kumar Singhel, Managing Director & CEO, Bajaj Allianz General Insurance Co. Ltd
#Insurance #BFSI #Finance #GeneralInsurance #insurancesummit #OutlookMoney #Money #OutlookMagazine #OutlookGroup
Follow this story and more: https://www.outlookindia.com/
Anand Roy, Managing Director at Star Health and Allied Insurance Co. Ltd.
Bhargav Dasgupta, Managing Director & CEO, ICICI Lombard General Insurance Co. Ltd.
Tapan Kumar Singhel, Managing Director & CEO, Bajaj Allianz General Insurance Co. Ltd
#Insurance #BFSI #Finance #GeneralInsurance #insurancesummit #OutlookMoney #Money #OutlookMagazine #OutlookGroup
Follow this story and more: https://www.outlookindia.com/
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NewsTranscript
00:00 Welcome to the second edition of the Outlook Money Insurance Summit.
00:08 The topic of discussion is the rise of bite-sized insurance and the utility.
00:13 And we have with us eminent industry leaders Anand Roy, Managing Director at Star Health
00:18 and Allied Insurance, Bhargav Dasgupta, Managing Director and CEO at ICICI Lombard General
00:24 Insurance and Tapan Singhal, Managing Director and CEO, Bajaj Alliance General Insurance.
00:30 A very happy new year to all of you and thank you so much for joining me for this discussion.
00:36 So bite-sized insurance is something that is very new for the insurance industry and
00:42 with the advent of digitization, it has got a major leg up in the last two years.
00:48 And it has opened up interesting avenues of providing cover across the landscape of general
00:52 insurance, but it also leads to the fear that, you know, somewhere in this rush to buy low
00:57 ticket, immediate use kind of policies, the focus will go away from the importance of
01:03 comprehensive covers.
01:04 But starting the discussion about these policies that are really the talk of the town in the
01:09 insurance sector right now.
01:11 I'll throw the first question to all of you is what do you think is behind the rise of
01:16 this kind of insurance?
01:17 Maybe Bhargav, you could start with that.
01:20 Yeah, thanks, Nidhi and thank you for having us here.
01:25 You know, while there is a lot more talk about bite-sized insurance now, as you rightly identified,
01:32 there is a lot more awareness and maybe even advertisement.
01:36 But actually bite-sized insurance policies have been there at a smaller scale.
01:41 I remember back in 2006 or 7, we had launched a 50 rupee, you know, outpatient policy for
01:47 the rural markets, part of our social outreach initiative program.
01:51 Of course, it hadn't kind of scaled into the, you know, the urban markets at that point
01:57 in time.
01:58 And I think the point that you're making about, you know, this becoming quite popular now
02:02 is as I said, because of maybe the advent of two or three things.
02:06 One, the digital distribution, which makes it easy to, relatively easy and lower cost
02:12 to sell these products.
02:14 Second is, I would say a large number of fintech players, you know, payment companies, you
02:19 know, aggregators, you know, BNPL companies, who are looking to attach, you know, contextual
02:27 policies to their customers to increase, you know, the relationship depth with their customers.
02:34 So that I would say would be the second major reason apart from the digitization.
02:39 But the need was always there.
02:40 And I think it says that some of these changes that has happened in the ecosystem is helping
02:44 us do more with this kind of, these kind of products in the market.
02:49 Okay.
02:50 Anand and Dhawan, would you like to add something to this?
02:52 What is leading to this kind of rise of bite-sized insurance, according to you?
02:57 Anand, you go in first, after you.
03:01 Sure, I just, I will just, you know, concur with what Bhargav mentioned, you know, the
03:07 concept is not new.
03:08 I remember also way back, we started off with travel insurance was also a type of a bite-sized
03:15 product, you know, where people could buy insurance for exactly the number of days they
03:19 would travel as compared to what used to be earlier a package policy, which was, you know,
03:24 predefined.
03:25 So I think, you know, bite-sized concept has always been there.
03:28 But now with the onset of, you know, a lot of online e-commerce and stuff, I think there
03:35 is a opportunity to cross-sell and attach relevant insurance coverages along with the
03:41 products that customers are buying online.
03:43 So I think, you know, it has become more popular now, of course, but yes, the bite-sized product
03:50 concept has always been prevalent in the insurance industry, not so largely as it is right now.
03:55 Okay, Tapan, like Anand mentioned, I think it's also to do with the advent of e-commerce
04:00 companies like, you know, these your Ola's and Uber's with which you are seeing these
04:05 policies attached to really think those are also a nudge towards this.
04:10 So first understand this that are people buying bite-sized insurance or is it bundle?
04:16 Before we get into that, is it really taking off or is it the new thing or the new normal
04:22 happening?
04:23 See, one of the dilemmas for the insurance industry has been across ages, people don't
04:28 get up to buy insurance.
04:30 So I think most of the insurance that if I talk about generations being sold is what
04:35 is mandatory either by bankers or by law or which is requirement and health obviously
04:41 has picked up pretty good now, which is not mandatory, but people feel the need of it
04:44 and they see the high cost happening.
04:47 So that's picking up.
04:48 So bite-size to me has been very interesting.
04:50 A lot of it is bundled.
04:52 I think the customer just gets it.
04:54 If you ask 10 customers that do you know that you got an insurance with, this is right of
04:59 yours, they are surprised to see if nine of them say yes, yes, I'm aware and I consciously
05:04 took it.
05:06 But there's some bites insurance which actually has taken off, let's say the mobile insurance.
05:10 Again, like I mentioned health insurance took off because people realize the need of it
05:14 and they felt that they should have a good health cover because it makes a difference
05:17 when you see this huge hospitalization cost happening.
05:21 Mobile insurance again, I've seen that people see the need of it with mobiles do break and
05:25 they find that they're able to, it's too expensive and a lot of people buy fancy mobiles and
05:29 very expensive ones and they see that going on.
05:32 So there I've seen people consciously buy.
05:35 But like most insurance products, I've seen bite-size also, most of it still goes as a
05:39 bundle.
05:40 Some of it conscious pickup has happened.
05:42 Now leaving that aside, it's a new distribution which has come through because of the ease
05:46 and you can sell the small ticket size without the cost of selling it.
05:49 That's an earlier time like Bhargav mentioned, Anand mentioned that bite size is not new.
05:54 There were enough policies, I think not even in 2000, I remember early 90s also, 1986 also
06:01 you had all this PA policies and all and even today a personal accident policy for 1 lakh
06:06 cover, no death only, cost you 40 rupees a year.
06:09 Is it not bite size and such an amazing kind of product then what else will be bite size?
06:14 So always dependent to sell a 40 rupees policy with a distribution which was not digital
06:18 that time, it would not happen because of the distribution cost required.
06:23 So with the advent of e-commerce, with the advent of food distillation, with this obviously
06:28 small ticket size products can be sold now and they are viable because you don't have
06:33 to spend so much on distribution on that basis.
06:35 So it's a phenomena which is going to stay, it's going to get powerful over time, I think
06:40 but it is also evolving like other lines of business and that is my view on this.
06:45 But also I would like to ask you gentlemen, you are saying that distribution has become
06:53 perhaps easier because they are coming bundled with other services but what about, I mean
07:00 I take a bite size insurance perhaps for a trip to the airport and I don't face any challenge
07:06 the next time because so many times it happens that you book a ticket and you don't take
07:12 travel insurance.
07:13 A lot of times most of us don't click on that option of taking travel insurance especially
07:19 if it's a domestic.
07:20 But do you think that this can be sustainable in the long run as people will get used to
07:26 it because this whole thing of renewal distribution is there is no direct phase that is making
07:33 you understand that you might need it or you may not need it.
07:36 It is up to you, your decision whether you are going to take it up or not.
07:40 So do you think it can translate into a habit?
07:43 You want to go first, reverse the order.
07:46 Thank you, Bhargav.
07:48 So I think what excites us is that for us the biggest challenge is not about products.
07:53 I think insurance industry is amazing products.
07:55 Honestly, I am in awe of the product industry, not because I am part of the industry but
07:59 it's amazing what a price they offer.
08:02 The challenge has been the need and awareness of it because these are low frequency and
08:08 high impact event and people don't think it will happen to them.
08:12 That is the challenge for industry.
08:14 So the way we look at it is the more people get used to having insurance and they may
08:19 or may not have exhausted it or taken a claim out of it which is not the purpose behind
08:26 that everybody has to get claim only then they should start accepting it.
08:30 But the more they see things happening around them, let's say when you saw COVID happened
08:33 people really bought COVID policies.
08:35 I think it started shooting up and you will see things happening around them and they
08:39 know that these are the means through which they can get an insurance on the fly, really
08:43 wherever they are going.
08:44 Let's say travel insurance, a lot of people delist it which is actually interesting.
08:47 If you look at the cost of the travel insurance on any website, it's about 100 rupees plus.
08:53 You are paying a ticket for 8000 rupees but for the 100 rupees you will either take out
08:58 the tick box and not do it.
09:00 But fundamentally we think about it, if you pay 100 rupees more also, you are ready to
09:04 pay for let's say 250 rupees for a cup of tea in a flight.
09:07 Sometimes I tell people jokingly that we should carry our own tea bags with us, ask for hot
09:13 water and you have it, instead of paying 250 rupees for a cup of tea there.
09:17 But for 100 rupees insurance we will de-tick it.
09:21 So I think the way I look at it, the more such kind of initiatives happen, the more
09:25 customers are aware about it.
09:27 They may or may not feel the need of it but as the awareness level goes up, as people
09:31 see it and read more about it, these things will pick up.
09:34 So it has its own journey.
09:36 So I don't think that there is something that we should worry about, it was not happening.
09:40 I don't think that we should worry about people de-ticking.
09:44 We should make this continuous effort of creating awareness.
09:46 We should make this continuous effort of offering amazing products to the customers of high
09:50 value to them.
09:52 And then I think as time progresses, these things pick up.
09:54 So that's my view on that.
09:56 So Anand, what do you think, is it really a utility-based, are these really utility-based
10:03 products and people will take it up like Thapan is saying that eventually the uptake will
10:09 increase as awareness increases etc.
10:12 Absolutely, I totally agree because see, people are realizing that people are buying more
10:18 expensive stuff, people are taking more trips and bite-sized insurances as both Bhargav
10:25 and Thapan have mentioned, it's contextual in nature, but you're actually purchasing
10:30 something and you feel the need to protect that purchase that you're making.
10:34 And here it is an offering which is very, very reasonably priced and you don't mind
10:40 adding that on as an add-on.
10:42 So I think that's the context.
10:44 But I come from a pure play health insurance background.
10:49 So from a health insurance point of view, bite size is not something which is very,
10:54 very relevant because I believe at a health insurance concept or even for that matter
10:59 for a life insurance, the protection plans should be comprehensive in nature because
11:05 see, at the end of the day, you want to give something which the customer will actually
11:09 derive the true benefit out of it.
11:11 There's no point in selling something for a very short period or for a context.
11:16 And when there is a need for the insurance, it doesn't serve its purpose.
11:19 I'm talking about health in general.
11:22 So I think bite size in health insurance is not very, very relevant as far as I am concerned.
11:29 But what is more relevant is how can we make the premium bite size to the customer so that
11:35 they look at the product as a bite size product.
11:37 So can we offer them premium payments and installments?
11:41 Can we bring all this new technology like BNPL and all of that on the health platform
11:46 so that eventually it becomes a bite size purchase for the customer, but all the same
11:51 time getting a comprehensive coverage?
11:53 I think that's how I look at it from a health insurance point of view.
11:56 So yeah, please go ahead.
11:59 I was saying, just to complete the thought process, picking up on what Tapan said, I
12:06 think one of the beauty of general insurance is that we can conceptually cover every type
12:13 of risk that a consumer perceives.
12:17 And as life, business, society becomes more complex, new type of risks emerge.
12:25 And really, it's an opportunity for us as an industry to create products which address
12:30 those risks in a manner that consumers find value, which is the point that Tapan was making.
12:38 And if you look at, adding to that point, if you look at one of the, I think the cultural
12:42 mindset of India has been traditionally, India has been traditionally a society where family
12:49 comes in to support you.
12:51 And as you become more urban, more nuclear, I think people begin to realize that you need
12:56 to fend for yourself as well.
12:57 I mean, you can, of course, all of us depend on family for many things, but you do need
13:01 to fend for yourself.
13:03 And as society progresses, people think of protecting themselves from some of these new
13:09 age risks.
13:10 Just to talk about a couple of new things, for example, let's say cyber, Tapan talked
13:15 about mobile, very, very relevant.
13:16 I mean, 10 years back, that wasn't a relevant category of product in a sense, right?
13:21 Because there was no need to buy, there was no mobile phones in that sense, smartphones
13:25 at that time.
13:26 And you didn't need to protect it.
13:28 Today, if you look at it, cyber insurance, the exposure and the risk wasn't there 10
13:33 years back.
13:34 Today, it is there and you need to protect yourself.
13:36 So I think it's really a beautiful industry in a sense that we can actually get into very,
13:43 very new emerging types of risks.
13:45 And we have to do it in a manner that is contextual, it's easy to understand, maybe initially a
13:50 bit inexpensive, so that people start exploring and using them.
13:56 And as people do that, the awareness spreads and people end up buying more and more products
14:02 as society changes.
14:04 Okay, so another thought that comes to my mind regarding bite sizes that when it comes
14:09 to the rural and semi-urban areas, or you would call it tier 3, tier 4, or even tier
14:15 2 cities, I mean, especially the low income groups, the small ticket size is something
14:20 that may attract them, even in health insurance, even in other general insurance categories.
14:25 But the other challenge is that a lot of these policies are also since they are bundled with
14:32 say e-commerce platforms and others, there's an element of digitization attached to them
14:37 to a large extent.
14:39 So you know, but there may be digitization challenges in these areas, the categories
14:44 that I was mentioning.
14:46 So how does that gap kind of, how does that come together in terms of servicing of insurance
14:53 or servicing of these kind of products to these kind of segments?
14:57 So anyone could take this question, please.
15:01 I think we reverse the order again, Marga.
15:06 Let's follow that as a no.
15:10 So yeah, Nidhi, I think that's a great point.
15:12 And you know, as I started, all of us have had products and you know, we had done some
15:17 experimentation in the rural market, exactly the point that I'm making.
15:20 And rural market is a segment where you have to make it more affordable.
15:24 I mean, you know, the entire market is potentially just a bite size market.
15:29 But it is in my mind a fallacy that digitization and digital payments is not prevalent in the
15:34 rural market.
15:35 At least our experience is today, almost 50 to 60% of payments that we are seeing from
15:39 the rural markets is digital payments.
15:42 There are other, you know, distribution models that are emerging, you know, riding on existing
15:50 models, for example, the government CSE platform, right?
15:54 So the CSE platform is a very interesting outreach program to, from the insurance perspective,
16:00 to use an existing platform to, again, provide very low cost insurance policies.
16:04 These could be standard, you know, motor vehicles or tractor or, you know, small ticket personal
16:10 accident or small ticket health policies.
16:13 Most of the processes are completely digitized, just to ensure that the cost is minimized.
16:17 Otherwise, you can't afford to do it.
16:19 So actually, it's happening.
16:20 What you have to do is, again, think of the customer at the end of the day, design the
16:25 product that is easy to understand, consume, and claim, so that the experience is positive
16:33 and you build a positive awareness on the ground.
16:36 So my experience is that, you know, even for the rural market, digital, you know, that
16:41 bite size insurance is becoming very, very popular, not the same type of bite size insurance
16:45 that is prevalent in the urban markets, but products that are relevant for the rural markets.
16:50 Just to add to that, I think, totally agree, because see, the key is the relevance, okay,
16:57 keeping the customer at the end of the, you know, that's keeping them at the center of
17:01 the entire offering.
17:03 Because rural does not mean the aspirations are lower, okay, the rural markets have very
17:09 high aspirations, they are looking forward to getting the best, you know, treatments
17:14 or best facilities or best services, what other large cities are getting.
17:19 So I think, you know, the bite size is totally contextual.
17:23 And it is not market relevant, it is more, you know, on the purchase journey, what the
17:28 customer is looking forward to, in that context.
17:31 I think what we have to do today is, you know, to increase the penetration of health insurance,
17:37 I think bite size products are a great beginning, you know, because at least at the younger
17:41 age group, we see that people look at these products more from, you know, understanding
17:47 what insurance can actually cover, because insurance, as both the panelists mentioned
17:51 here can cover almost everything today in India.
17:53 And I think that's a very, very good entry into the world of insurance for the younger
17:58 age segment, especially people who are, you know, using these platforms on the e commerce
18:03 sites and all of that, and probably try to cross sell more comprehensive products to
18:08 them as we go along so that you know, they become more protected in the true sense of
18:13 the, you know, the word.
18:14 And I think that's the way we have to look at this bite size products.
18:18 Okay, Tapan, you want to weigh in on this?
18:21 Yeah, Nidhi, I think first and foremost to, and Bhargav did allude to that, to say that
18:26 risky savviness is not there in the rural side or no, in the strata, which is no, as
18:33 we call upcoming is wrong.
18:37 Because I think if you just check with, you know, at least my domestic health is on Facebook,
18:43 my retail vendors on Facebook.
18:45 And we'll look at rural India also, I think we do a lot of business there.
18:51 Most people are on Facebook.
18:52 And if I look at the sale of Amazon Flipkart is more in the tier two, tier three than in
18:59 tier one.
19:00 If I look at the bigger brands being sold, it's more in the smaller towns.
19:05 So I think India has changed a lot from what we think and what we know still have a view
19:11 on.
19:12 So obviously, like Anand also mentioned that the aspirations are there.
19:15 Now it's up to the industry, how do we cater to that, which is relevant, and contextual
19:21 from that perspective.
19:22 More than getting to products, how do we service the claims?
19:26 I think that is what is very, very critical.
19:28 The infrastructure to service the claims is what the industry and the industry is doing
19:32 a job.
19:33 Bhargav did mention about CSC.
19:34 I think CSC is an amazing infrastructure setup and the government collaboration of the amount
19:39 of government business is happening with crop insurance with the government health business
19:43 reaches there and the servicing is happening and people are experiencing claims now.
19:48 Infrastructure is getting created.
19:49 So for me personally, I feel that if five years from now, we have a panel like this
19:53 and all of us are here again, this question would not have relevance because the market
19:57 would actually have become very, very interesting, very big and very, very powerful in its own
20:02 way.
20:03 Because the creation is happening, like I mentioned to you, and people have wealth,
20:06 it is not that they don't have wealth and like people like Anand have set up a strong
20:11 infrastructure for health in the smaller towns and cities.
20:14 The buildup is happening with it.
20:16 So we just have to wait and watch and I think the industry is working on it and we shall
20:20 see more of it happening and bite size will also happen in the places.
20:24 But right now it's mostly government driven and you have the smaller two wheeler vehicles
20:28 and all which is happening.
20:29 But why not for a agriculture pump set, a bite size insurance?
20:33 Why not for a small like a three month or two month crops, small like strawberry crop?
20:39 Why should not we, which is to the vigour of nature, why should not we have small bite
20:43 size insurance?
20:44 So potential is there and I'm very hopeful, very sure that this is actually going to take
20:49 up pretty well.
20:50 Okay.
20:51 So one thing that you mentioned, Mr. Singhal was claims.
20:55 So what is the claims scenario as of now?
21:00 Because I understand that this market is not very huge as of now.
21:05 It's still in its initial stages though it has started ahead for the past couple of years.
21:10 But what about the claim settlement?
21:12 Is there any, is there satisfaction at that level?
21:16 Because these are small and these are, a lot of times maybe I take a bite size insurance,
21:23 but maybe because the amount is small, maybe I don't need it exactly at that time.
21:32 How many customers are actually coming back to make those claims and how much of it is
21:36 really getting settled also?
21:38 Yeah, maybe I think first of all, let me talk about the industry, a small hurt of the industry
21:44 and then I'll come to the specific question that you have.
21:46 If you look at the hurt of the industry, the industry's combined ratio for now 16 years,
21:50 correct me if I'm wrong, it's been close to 115 to 120%.
21:55 To give you just a rough idea of combined ratio, it means every 100 rupees industry
21:58 takes, 120 is the outgo.
22:01 And for even amazing big e-commerce companies, which we hear are so customer centric, they
22:06 lose 5 to 6 to every 100.
22:08 Here the industry is losing 15, 20, that means they are paying claims through the nose.
22:12 Still people have a lot of view on the industry that they don't pay claims.
22:14 So I thought I'll just park this point here.
22:16 The industry pays scale very, very well and it pays it very, very gracefully also.
22:22 So out of 100 customers, the claim settlement figures was really good this time, the India
22:27 report that came in December.
22:28 It's been a whipping boy of everybody, of the media houses, of the ministers.
22:36 So I think it's a bit unfortunate.
22:37 That's why I'll take this forum.
22:38 You know, Tapan, if I may weigh in and support the point that Tapan is making, because he
22:43 will move on to some other point.
22:45 We had studied, not just we, a global consultant had studied all the financial services sectors,
22:52 the number of, let's say bank account or policies or customers, etc. and looked at the number
22:58 of complaints.
22:59 GI industry had the lowest percentage.
23:02 But even though the claim number that we pay is very, very large.
23:04 Back to you Tapan, just to support the point.
23:07 Thank you, I think it's a very, very good point.
23:09 The point I should make is that the industry pays amazing claims.
23:13 99.999% customers would be very happy with it.
23:16 The point that the grievance ratio is, runs into like less than a percent is 0.0 something.
23:22 I forgot the exact number.
23:23 They're very happy.
23:25 The ones who are dissatisfied because the industry is already whipping boy and that
23:28 makes a noise that is not good.
23:29 Now let's come to the bite-sized one.
23:32 We have been one of the largest mobile insurers.
23:34 I think we started very early on.
23:37 And we can settle claims remotely.
23:40 So it does not matter that the mobile, if damage has to come to our office or somebody
23:45 has to go for survey there.
23:46 If there is damage remotely, we assess the claim and transfer the money to account.
23:51 So claims do happen, mobile claims do happen.
23:53 The loss ratio in a mobile insurance is pretty high.
23:56 It is not that the loss is low.
23:58 And we all know, Nidhi, genuinely so many of our mobiles do get broken.
24:01 We try our best to save it with the life.
24:03 I think there are so many jokes, there is somebody fell down with a new iPhone.
24:08 Then the question is not that did your bone crack or is the phone safe.
24:12 People know, I think that is the kind of protection to let us still it does happen.
24:16 So claims do happen, Nidhi, in bite-sized insurance, it does happen.
24:19 And I think, as I said, some categories in which it happens more frequently, some do
24:23 not happen.
24:24 Like a ride insurance would be a very low frequency, but very high severity.
24:27 But for something like mobile insurance, it's very high frequency and it does happen.
24:32 The assessment happens remotely and the money gets transferred.
24:35 You will be surprised to know that the transfer of money can happen within the 30 minutes
24:39 of the mobile getting broken, even if you are in the farthest part of the country where
24:43 there is no access, but at least you can access the internet.
24:47 If you can reach the internet and you are in a place like that, like sitting on top
24:51 of a mountain, internet connection is there, your claim will get settled.
24:54 So I think most companies have built up this competence.
24:56 So claim settlement is something, obviously, that is our main bread and butter.
25:00 If we don't sell claims, well, how can we be in the industry?
25:04 So I think we do that, Nidhi.
25:07 Yeah.
25:08 So the idea was more to ask whether people are actually coming for claims rather than
25:12 settlement.
25:13 Yes.
25:14 When it happens, they do.
25:15 Yes.
25:16 Yeah.
25:17 So Anand, I wanted to ask you in terms of health insurance.
25:18 So when you talk about breaking health insurance into bite-sized products later, what you
25:23 talked about earlier about this concept of how bite-size can be brought into health insurance,
25:30 how would you, when it comes to health insurance, there is a list of exclusions and medical
25:38 tests and all that people have to go through to be eligible for a certain claim or a certain
25:45 policy or a certain product.
25:47 How would you kind of marry the two together?
25:50 So in the context of health insurance, as I told you, I'm of the strong believer that
25:57 the coverage should be comprehensive.
25:59 The premiums can be bite-sized, can be made bite-sized.
26:03 And I think that's the combination that will stick with our potential customers.
26:09 But let's talk about the current scenario in health insurance and some of the products
26:15 that were introduced, which will fall technically, let's say, in the bite-size segment.
26:20 There are products which cover specific diseases, for example, dengue or chikungunya or for
26:26 that matter, there are products which cover OPD treatments alone.
26:32 And recently, in the current context of the pandemic, the industry did launch a product
26:37 for covering only corona-specific treatment.
26:42 And I think that was really something which was in time, in the midst of a pandemic, the
26:48 entire industry came together to offer a product to protect the society at large, which was
26:53 very vulnerable.
26:57 And I think these are the kinds of things that the insurance industry and the general
27:00 insurance industry in particular has done.
27:03 But as far as health insurance is concerned, I strongly believe that customers should look
27:10 for a comprehensive coverage and we will be able to make that coverage more palatable
27:18 by making the premium bite-sized.
27:20 I think that's what I would like to stick my argument on, because I do not believe,
27:25 frankly, that a short period cover or a disease-specific cover for two months, three months is a proper
27:34 protection being offered.
27:35 And at the end of the day, insurance is a subject of protection.
27:39 So we do not want to offer something that would be not available at the time of need.
27:45 And I think that's what I would like to insist upon.
27:47 So Anand has been continuously raising this issue of comprehensive insurance.
27:53 And that is one of my thoughts also.
27:56 That, Bhargav, do you think that bite-sized insurance in any way can kind of dilute this
28:03 market or the need for comprehensive insurance, especially when it comes to health, even personal
28:09 accident for that matter, because that is also, which is a large cover in the bite-sized
28:15 space.
28:16 So what are your views on that?
28:19 So let's look at different categories.
28:21 I think what Anand is saying is very relevant in the health segment, which is the segment
28:27 that he's talking about.
28:29 And if you look at the general insurance, multiline general insurance companies, we
28:33 provide health as also other categories of product.
28:35 And going back to the point that I made, there are different types of emerging risks that
28:39 are there.
28:41 And every single type of risk need not require a product which is very expensive.
28:49 You can actually design products which are relatively cheap and bite-sized and relevant
28:55 for the context of the customer's risk.
28:58 Let me give you a small example.
28:59 I mean, in the same, you talk about personal accident, personal accident anyway is a bite-sized
29:03 product because the size is very, very low.
29:06 But if you think about even a PA policy, when I'm traveling in a certain terrain, I want
29:14 a policy for, let's say, 15 days, because that's the period that I think I'm at risk.
29:19 Why shouldn't I get a product like that?
29:22 I don't see any issue with developing and providing such products to customers, because
29:27 it's relevant and contextual for the customer.
29:30 We have to think, put ourselves in the shoes of the customer and think about what is it
29:33 that is relevant for the customer and design those products.
29:35 Anand's point is absolutely valid.
29:37 When you think about your health, you need to buy something competent.
29:40 But the types of risks that we cover in multiline general insurance companies is multifarious.
29:46 It's not just for health, it's across different categories.
29:48 You know, cyber insurance, you may buy a policy which is even as low as 50 lakhs, sorry, 50
29:54 rupees, and you get a protection of 50,000 rupees.
29:57 You know, as a consumer, I'm happy with the production of 50,000 rupees, that's good enough
30:01 for me.
30:02 If I want to buy a cover, which gives me even higher protection, that's fine.
30:06 Coming back to even health, I personally believe what bite size insurance does is make people
30:12 conscious and aware, there is an affordability issue across different stratas of society.
30:18 And when you're first coming into that insurance consumption bracket as a consumer, you may
30:24 want to experiment with smaller products.
30:27 And then when you realize that this is not going to cover you for everything, that's
30:30 a, in a sense, a good entry point to buy the comprehensive products that Anand rightly
30:34 talks about.
30:35 So, I think the moot point that I'm making is, in Horses for Courses, different types
30:41 of risks that customers have, different needs that customers have, we as an industry have
30:46 to design products and give them in a manner that is easy to understand, consume and clean.
30:52 That's what our job is.
30:53 So, is it also like something like what you're suggesting perhaps is like creating a menu
31:00 which is a tasting menu so that consumers can go on with the full menu later to understand
31:08 the comprehensive, to understand insurance, the basics of insurance, what it can do to
31:12 you, how it can protect you, and then go on for a comprehensive cover.
31:16 Because even when it comes to these kind of trip insurance and these small kind of insurance
31:21 policies, there is always this argument also that you could take a comprehensive travel
31:26 insurance if you are a frequent flyer.
31:30 Absolutely, you're right.
31:32 You can take a comprehensive cover and we see people who buy covers for a longer period
31:36 and pay a bit more period on travel insurance specifically because they travel a few times
31:40 in a year.
31:41 And it makes sense for them to buy maybe a long term cover.
31:45 So, your point is absolutely, you're making the same point that I'm making that I think
31:49 it expands the pie, it opens up the market for multiple segments of customers, young
31:58 millennials who may otherwise wait till the age of 35 to buy health insurance may experiment
32:02 with some small ticket covers.
32:06 And that builds awareness that builds connect with the insurance provider and opens up the
32:11 market is my belief.
32:14 And that's a positive.
32:15 So but what has been the experience so far?
32:18 Maybe you could take that.
32:20 Is it really working like that, that you know, people are coming for these small insurance
32:23 policies and understanding it and taking it forward to say a comprehensive policy or a
32:30 policy that gives them wider coverage?
32:34 I think any answer to those would be too early to give.
32:39 So I cannot say that we have seen a clear pattern about it.
32:43 The point that Bhargav mentioned, the way you said that tasting, I think it's a very
32:47 powerful point.
32:48 See, somebody and most people don't buy insurance at all.
32:52 The insurance is not only under insurance, but underpenetrated and we all know about
32:56 it.
32:57 People don't buy it at all.
32:58 Now, let's say they get used to buying it.
33:01 And they start looking at it, then they obviously would think why not this?
33:04 And they can afford it.
33:05 Somebody going on a 15 day trip, they must be spending at least 30-40,000 rupees.
33:09 So they can pretty well afford something which is 405 rupees.
33:12 So let's understand the difference between bite-sized insurance and full-blown cover.
33:15 I think that also is an interesting point.
33:17 I think we underestimate this.
33:18 Let's say bite-sized insurance, we are talking of 10-20 rupees.
33:21 A full-blown insurance may cost 500-700 rupees, a travel insurance policy.
33:24 Let's say what Anand is talking about also, full-blown health cover, will cost 2500 rupees.
33:28 So the beauty is that we are not talking about huge difference.
33:32 Somebody spending about 50-60,000 rupees on a trip can afford a 2500 full-blown cover
33:36 also if somebody is ready to pay 50-70 rupees for bite-sized insurance.
33:40 Now, let me give you my personal example.
33:43 Today I may say that I am over-insured.
33:45 But I love to be over-insured.
33:47 Once I understand the insurance products, any insurance product you think about, I think
33:52 we were the first to launch retail cyber insurance.
33:54 My daughters bought the first two policies in India.
33:57 Every policy you think of, I'd be having it for myself.
34:00 The moment you understand the beauty of insurance, I promise you, you will buy all these policies.
34:04 We can afford it.
34:05 They are expensive policies.
34:06 When you talk of full-blown, it's not like you're going to buy a very expensive product.
34:10 You're talking a couple of thousand rupees, that's all, as a full-blown cover.
34:13 And bite-sized, you're talking of a couple of, like, 100 or 50-70 rupees.
34:18 So once people start getting used to looking at insurance, I have a personal belief that
34:23 they will go in for the full-blown cover.
34:25 But do we have a pattern to give you the right answer right now?
34:28 The answer is no.
34:29 I think it is still emerging.
34:31 As the pattern emerges, it should happen.
34:33 But that is my belief.
34:34 So another thing that I wanted to ask you, that, you know, like you were saying, you
34:39 know, understanding of insurance is very important.
34:42 But we do see that, you know, a lot of people still do not understand a lot of insurance
34:47 policies, let alone life and health, which are like the basic, even the general insurance,
34:52 even motor for that matter, which is, you know, quite, it's one of the most popular
34:57 ones because, you know, everybody has to buy a motor before they can drive out the cars
35:02 out of the showrooms.
35:03 So when it comes to bike size insurance, I know the ticket size is very low, so I might
35:08 be low.
35:09 But, you know, in terms of these insurance policies also do come with their own terms
35:16 and conditions.
35:17 They might be smaller on scale and compared to other policies and all.
35:23 So how do you think that awareness, that gap can be filled?
35:28 Anyone of you can take this question.
35:30 You're absolutely right.
35:32 I think enough has been said on the fact that customers don't understand.
35:37 And, you know, I think we make a lot of effort, you know, I know, you know, Tapan makes, we
35:43 make in terms of trying to make it as easy and simple for the customer to understand.
35:49 But it's a task.
35:50 I think one of the advantages of some of these bike size products is that they are actually
35:57 even more simpler than some of the comprehensive products.
36:00 And when they're simpler, the benefits are very, very, if I can call it almost binary,
36:06 you know, event of this nature happens, you get a certain lump sum payment.
36:10 If you look at insurance, there are two types of insurance, fundamentally two types of insurance.
36:14 One is indemnification.
36:15 So your whatever is your extent of loss, we will reimburse that.
36:19 And the second is benefit.
36:20 You know, whatever may be your loss, I will pay you a fixed amount.
36:23 The advantage of the bike size insurance is most of them are largely benefit construct,
36:27 doesn't you pay get a fixed amount of money in the event something, you know, unfortunate
36:33 happens, right?
36:34 So, let's say a vector borne disease, you know, you have a Tengi cover of 50,000 rupees,
36:38 you get Tengi, we will pay you 50,000.
36:40 You have a mobile insurance, the mobile, you know, breaks, I will give you, you know, let's
36:44 say 25,000.
36:45 So it's easier to communicate.
36:48 And the other thing that has happened is on a digital platform, you can actually break
36:51 down the features and the benefits in a very simple manner so that it's easy for customers
36:57 to understand.
36:58 And I think that is one of the strengths of some of these bike size product constructs
37:02 that we see in the market.
37:03 I think Bhargav put it very beautifully, the bike size is actually much simpler than the
37:09 comprehensive one.
37:10 Now, having said that, Nidhi, let me give you a very simple principle.
37:13 I think it also surprises me when people talk of complication of GI products.
37:17 Why surprises me that if we are aware of just one thing, anything which is damaged or has
37:24 pre-existing or whether loss has already happened or is happening, does not get covered.
37:31 I think if this principally we understand this, then whatever you are buying for actually
37:37 would be covered subject to some depreciation.
37:39 Let me put a very simple principle.
37:40 Now, when you put these two sentences and apply it anywhere, you will find that most
37:45 of what you bought is actually covered for.
37:48 The dispute that's happening for is when you go for these kind of segments in which you
37:52 start feeling that the pre-existing should have been covered or my previous damage should
37:56 have been covered or I paid the premium of 5 years, why should I not get my previous
38:00 damages happening.
38:01 I think that is where dispute happens.
38:02 Dispute never happens on the product, never happens on the standing.
38:04 I think this also has been, which I say a hurt of the industry.
38:07 A lot of people say it's complex and I ask them, okay, what's complex?
38:10 It's in a motor car, what's complex?
38:12 Your car meets an accident, whatever in the accident has happened will get paid.
38:17 Now you have scratches in the car, that's not an accident, that's maintenance.
38:21 So what's the complex part of it?
38:23 Insurance companies will cover accident and anything in accident will get fixed.
38:27 It's as simple as that.
38:29 Health, if you have something of an illness which is already there with you, now no company
38:33 typically would cover that.
38:35 So it would just mean that when you bought a policy and anything develops later than
38:39 that gets paid immediately.
38:41 So I think it is not very complex.
38:44 Again, it's a mindset issue, which I strongly believe.
38:48 And when Bhargav mentioned about benefit policies, it's so amazing.
38:51 You buy a policy, let's say DEMO or you buy for CATRAC and if it happens, you get the
38:55 full amount paid, no question asked.
38:57 Where can you get such simple products?
39:00 I think again, this industry, as I always say, sometimes you get surprised.
39:04 There's a lot of complications.
39:05 I ask people, tell me what's complicated in this.
39:06 I think it's just the two symptoms I mentioned to you, just keep that as a principle for
39:11 any insurance and name the product and then see what is not paid.
39:15 It's all paid.
39:16 It's as simple as that.
39:18 But bite size is actually more simpler, more easy and more straight through, I think, because
39:23 that's why bite size will work and will not work.
39:25 I think that's perhaps why, what is adding to its popularity also, the simplicity in
39:31 nature and also the utility because of which we are discussing this topic also.
39:35 So do you guys think that this kind of insurance is for everyone or do you really think that
39:40 it's only for a particular segment, maybe the younger generation who doesn't want to
39:45 look at, who's not ready to look at comprehensive covers yet?
39:48 Maybe they should, but maybe they're not ready or that segment which is just ready for those
39:55 low ticket size insurance policies.
39:57 Parag, could you take that?
40:00 Yeah.
40:01 So I don't personally believe that it's designed for a certain segment, but it's obviously
40:06 the younger, the millennials, the younger people who are actually more digitally savvy,
40:14 using Ola, for example, when you have a ride hailing service, anyone who uses Ola or Uber
40:20 is buying some of these one rupee policies, etc. that you talked about Nidhi.
40:25 So coincident, I mean, given the nature of the customer segment that uses the fintech
40:30 and the digital e-commerce platforms, yes, you are seeing more younger population buying
40:35 this, but it is not designed necessarily for just younger people.
40:38 It is actually designed for anyone who uses those services and there is a risk that they
40:44 are bearing because of the use of those services.
40:47 So Tapan, do you also think that it's meant for everyone?
40:50 You of course mentioned that your daughter and you are over insured and you end up buying
40:55 all kinds of policies.
40:56 So it's pretty much out there.
40:59 People like you and me, everybody should be taking up these policies when taking an Ola
41:04 ride or perhaps ordering in food.
41:07 Yeah, I think when I look at my family, my younger daughter and my father, they are the
41:14 most digital savvy people.
41:16 So I think again, these are all, I think when I listen to Nidhi now and look at experiences,
41:22 I think the myths and the reality is very different.
41:25 So I can guarantee my father can beat me to any kind of e-commerce sites, any purchases,
41:31 any kind of ride hailing taxis or suite, I still am lost at it.
41:36 So he tells me more about buying insurance than I can talk about from what is happening
41:41 across my younger daughter.
41:44 So when you look at the spectrum, I think they both are very powerful.
41:48 The issue which comes through is that how are we as an industry able to put together
41:54 things of interest for all spectrum.
41:55 We should never think that the spectrum of customers would not be available.
42:01 That is a myth.
42:02 I don't agree.
42:03 I think an industry, how can we go out of the spectrum and how can we cater to every
42:09 section of customer is what we should be working on.
42:12 And the work is already happening.
42:13 I can see a lot of products at different spectrums coming through.
42:16 But I think we should cover the entire thing, not only the millennials.
42:19 Now millennials are getting old now.
42:20 We have to talk about the Gen Z now.
42:28 So we should actually cater to all spectrum, but we should not think that they don't.
42:31 They all really understand and look at it very well.
42:35 So summing up, is bite size here to stay?
42:39 And what other innovations do you think are waiting in the veins?
42:43 Of course it is here to stay.
42:44 And I think it will keep on increasing in size and scope.
42:46 And as I said, as new use cases emerge, new products that people use emerge, new risks
42:55 emerge, new products will get designed.
42:58 I think there is a scope for tremendous innovation in our country in terms of addressing very,
43:03 very episodic risks of individuals and providing them through bite size insurance.
43:08 I think, as long as the environment is open in terms of allowing these innovations, I
43:15 think there's a tremendous scope for growth of some of these products.
43:19 So I think our industry that was very lucky.
43:23 We cover risks and you see how risk keeps on evolving.
43:26 So it's a never ending process.
43:28 So every third day you have a new risk.
43:29 Now we thought when we started with the coronavirus, we thought a couple of months phenomena.
43:35 Now it's year phenomena.
43:36 Now we see people think it's going to stay a phenomena.
43:38 So look at any risk, cyber risk which has come through or it's constantly evolving.
43:43 So imagine which industry can talk of on a monthly basis, you have something new coming
43:48 up.
43:49 If you look at catastrophic losses now happening, five in a year.
43:52 When we were kids, when it was a rainy day in three, four years time and school used
43:56 to get closed, we used to get so excited.
43:58 Today, even if floods happen, schools are getting closed.
44:00 Times have completely changed and every third, four months is happening.
44:03 So one, the options of creating something relevant for customers, solving some customer
44:09 worries or risk is always there.
44:11 It's a continuous process.
44:12 Two, the ease of process and the ease of getting claims and getting the customer delight is
44:18 always there.
44:19 It's a constant process.
44:20 You need to keep on with the tech getting better every day.
44:22 You keep on pushing yourself and keep on innovating to deliver on that basis.
44:26 Third, with this bite size coming through, can you imagine Nidhi, the plethora of insurance
44:32 that can be offered?
44:33 If you tell me right now to start listing down bite size that we can offer between Bhargav
44:37 Me and Anand, I promise you for the next one hour, we will not stop.
44:41 From the same main products, we will create 100 bite size products.
44:46 So the point is there is so much to do and how do we spread the spectrum?
44:49 How do customers relish what we are offering and see value in it?
44:55 And how does it expand to the next level?
44:57 So I think for our industry, there is never a dull moment, be it for innovation or things
45:01 to stay.
45:02 And bite size is going to stay and is going to become more and more popular as time progresses
45:06 because of tech usage, I think people will find relevance of a shorter division of products
45:10 and they'll make it much more powerful, more beautiful.
45:13 My last question to sum up the session was that, what are the innovations that are waiting
45:17 in the wings and is bite size here to stay really?
45:22 Yeah, absolutely.
45:24 And I can't better what Tapan and Bhargav have said, they have put it so wonderfully
45:29 because bite size is a concept, it's not something that is going to go away at all because it's
45:38 a concept that's going to evolve.
45:39 Now, probably it may not be one rupee, 10 rupees insurance, it may evolve into something
45:43 more contextual based on what the customer demands and customer needs are.
45:48 And from a health insurance perspective, I would say that definitely there are opportunities
45:54 to sub-segment and categorize the products and make cheaper offerings, affordable offerings,
46:01 so that more and more people can come into the ambit of health insurance, whether it
46:04 is in the semi-urban areas or within the urban areas itself, we can look at various kinds
46:09 of offerings.
46:10 There are OPD products and dental products which can be offered on the bite size platform.
46:15 And I think all of us are working on that.
46:18 So as a concept, this is not going to go away.
46:21 Most important is how can we ensure that the services, the promises that are made on the
46:27 bite size products are kept up so that the stickiness of health, I mean, the insurance
46:34 itself will keep on improving going forward.
46:37 And hopefully these bite size customers, in the long run, we will get more data as we
46:41 go along, will become full time comprehensive customers of having over insurance as Tapan
46:48 mentioned and making sure that they get all in all comprehensive coverage in all segments
46:53 of their lives.
46:56 So that's what we're looking forward to.
46:57 Thank you so much, gentlemen, for throwing light on this new area.
47:00 I mean, a lot of people, they might be around, like you guys mentioned that these policies
47:05 have been around for long, but a lot of customers may not have known before one or two years
47:11 in the recent past.
47:13 So thanks a lot for joining me on this discussion and good day to you guys.
47:24 Thank you.
47:24 Thank you.
47:25 [Music]