- 8/1/2023
Agent’s commission, acquisition cost and popularity of insurance play a significant role in its distribution. The panel will discuss new delivery models and their effectiveness. Experts also examine the Regulator’s role and insurers’ wish list.
Sumit Bohra, CEO, GlobeSecure Insurance Brokers Pvt Ltd
Rashmi Ravi Iyer, Principal Officer, Director, Global Insurance Brokers Pvt Ltd
Venkateswara Rao Vakalapudi, MD, Anand Jeevan
Moderator: Amit Roy, Director PwC India
#Money #OutlookMoney #OutlookMagazine #OutlookGroup
Sumit Bohra, CEO, GlobeSecure Insurance Brokers Pvt Ltd
Rashmi Ravi Iyer, Principal Officer, Director, Global Insurance Brokers Pvt Ltd
Venkateswara Rao Vakalapudi, MD, Anand Jeevan
Moderator: Amit Roy, Director PwC India
#Money #OutlookMoney #OutlookMagazine #OutlookGroup
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NewsTranscript
00:00 [MUSIC PLAYING]
00:03 Hello, everyone.
00:12 We are excited to be with all of you.
00:14 And what we promised to do another 45 to 60 minutes
00:20 is a discussion around a very interesting topic.
00:23 And it's about the emerging distribution models
00:27 that you see in insurance.
00:29 One of the most happening sector.
00:32 And what we have with us is a very, very interesting set
00:38 of people who not only have the experience,
00:42 they have also executed this game for a very, very
00:45 long time.
00:47 And they will actually come up with some
00:50 of the very interesting points.
00:53 They will be open.
00:54 They'll be holding no bar to talk about the right things
00:57 at the right time.
00:59 They will also have some very candid views
01:02 about what should be there from the perspective of the wish
01:07 list.
01:08 But before I get into that, let me
01:11 start by saying that in our country,
01:14 insurance was something like a necessary evil.
01:18 And an insurance agent, irrespective
01:21 of life or non-life--
01:22 and in earlier days, there was nothing like a health
01:25 insurance--
01:26 was almost like a gabbar Singh, that people would
01:29 run away from such people.
01:32 And there was no status.
01:33 There was no glamour attached to that profession.
01:36 And they used to be ridiculed.
01:38 But over a period of time, I think what this country saw
01:42 was a very interesting unfolding of events.
01:46 And it started not just by the public sector units
01:50 that we had.
01:51 They did a splendid job in terms of laying the foundation.
01:55 2000 coming of all the new players
02:00 in form of privatization of insurance
02:03 saw very good growth, great interesting model,
02:07 bank assurance coming to India.
02:09 The penetration went to a very different level.
02:13 And what we saw after that are some very new, interesting,
02:18 emerging channels.
02:21 First 10 years of privatization, I
02:23 believe a lot of money, a lot of effort went on distribution.
02:27 Next five years, a lot of money went on research on products.
02:33 Some very interesting products across the sector came.
02:36 Last five years, we have been hearing
02:38 a lot about customer experience story, the digital India,
02:42 and the digital insurance.
02:44 How can we be away from that?
02:47 To set the tone, first of all, let me introduce myself.
02:50 My name is Amit Roy.
02:52 And I am a director for insurance with PwC.
02:56 I look after insurance as a sector.
02:58 I spent about two and a half decades
03:01 on the side of the insurance prior to joining
03:04 the consulting practice.
03:05 But I also wanted to introduce all the panelists one by one.
03:10 I would start with, obviously, Rashmi.
03:14 She is a very familiar name in the industry.
03:18 Needs no introduction, but why don't you,
03:20 for the sake of the viewers, also introduce yourself.
03:24 Likewise, we'll have introduction
03:25 for all the panels, and we'll jump to the topic discussion.
03:28 So over to you, Mrs. Iyer.
03:30 Thanks, Amit, for that wonderful kickstarting of this event.
03:34 I'm equally excited to participate in this discussion,
03:38 and I'm looking really forward to this.
03:42 A quick intro for me, I am principal officer and director
03:46 with Global Insurance Brokers since the last nine years.
03:50 My experience in the industry started
03:53 with New India Insurance Company.
03:55 That's where I learned about the basics of insurance.
03:58 And then early on in 2000, I joined ICICI Limited
04:04 as the founder employee to set up the general insurance
04:06 joint venture for them, which today
04:09 is the number two or three player in the entire market.
04:12 I spent eight to eight and a half years there.
04:14 And after that, I moved as managing director
04:16 for HSBC Insurance Brokers India.
04:20 So I feel really proud that I worked
04:23 in the public sector, private, as well
04:24 as the multinational sector from the underwriting vision
04:28 and to the broking industry.
04:30 And I think the opening of the sector
04:32 is what prompted me to get into this broking line.
04:35 And I'm very proud of the experience
04:38 that I gained all through.
04:39 And I look forward to contributing today evening.
04:43 Thank you.
04:43 Thank you so much.
04:44 Thank you so much for that introduction.
04:47 Coming to Mr. Bhora now, again, a very, very big name
04:51 for the industry, has contributed a lot
04:54 in the growth of the industry, and more importantly,
04:56 organizing the distribution side of it.
04:59 So Mr. Bhora, over to you.
05:00 Good afternoon, and thank you, Mr. Roy.
05:02 And thank you, Outlook, for inviting me.
05:04 Myself, Sumil Bhora, representing Globe Secure
05:07 Insurance Brokers.
05:09 I'm a chartered accountant by profession
05:11 and has been into the broking industry for the last 17 years.
05:15 So I started my career with practice
05:17 for a limited period of time and then jumped into broking.
05:20 And from last 17 years, has been representing customer
05:24 and proudly, always feel very proud to represent customer
05:30 and would like to take the cause of customer to newer heights.
05:34 Thank you so much.
05:35 I think we are definitely waiting
05:37 to hear some very candid views from you.
05:40 And thank you so much for joining the panel.
05:42 We come over to someone now who is actually
05:45 representing the sector from a very interesting perspective.
05:48 And actually, they are holding the new ways of distribution
05:51 in a very important way when the things are getting organized.
05:56 But before I talk about it, Venkat,
05:58 why don't you introduce yourself over to you?
06:00 Thank you, Outlook, and thank you, Mr. Amit.
06:03 And my name is Venkat, and I'm based at Hyderabad.
06:07 And I started my career in insurance in the year 2000.
06:11 And this is my successfully completed 20 years
06:14 in this industry.
06:15 I started my career as an agent in LIC of India in year 2000.
06:20 From there onwards that I started my journey
06:23 and slowly equipping the knowledge
06:26 and learning more and more.
06:28 Fortunately, last seven years, I became
06:31 that India's largest insurance agent in a retail domain.
06:36 And fortunately, that I've been part of one of the company
06:40 called Anand Jeevan, which is the founding company for managing
06:45 one of the South India's largest broking company called
06:50 the Providence.
06:51 And like that, there is another training and development
06:56 and recruitment areas in insurance domain.
07:00 So it is so--
07:02 apart from that, that I'm being a advisory council
07:05 member for IRDA's life council.
07:07 And the last two years, almost that I'm
07:10 being a part of the advisory council
07:11 member in IRDA life council.
07:13 That's what I am, and I'm really looking forward
07:16 to being part of this discussion to make.
07:19 Thank you so much.
07:20 I think what is very interesting,
07:21 like I said in the beginning, you
07:24 fought when no one was ready to fight.
07:26 And thank you so much for taking the message of insurance
07:29 to the masses.
07:30 And actually, you have seen the industry
07:33 from a very, very close quarter at that point of time.
07:35 And I'll definitely pick up your brain
07:38 for debating over the emerging models.
07:41 To start the discussion, I'll come back to this is IRDA.
07:45 And a lot of emerging models are--
07:48 we keep hearing about them.
07:51 How much of that--
07:53 and I must say at this point of time,
07:56 thanks to the regulator for allowing
07:59 some very interesting models.
08:01 There has been experiments.
08:02 There is a one-rupee insurance coming to India.
08:06 And I think the models are helping in a very big way.
08:10 Insurance is getting sold as a wrapper.
08:13 But are we really doing the thing
08:16 which is missing at the level where the insurance is still
08:20 not reaching?
08:22 And what is really in the emerging model?
08:24 Over to you, Rashmi.
08:26 Wanted to know your views on the emerging models to start with.
08:30 I'm a firm believer that insurance is a very ecosystem
08:35 driven industry.
08:37 The industry has always been very promptly reacting
08:40 to whatever the ecosystem demanded
08:43 in terms of development of new technology, new products, what
08:48 is happening in the ecosystem.
08:49 The insurance is always picked up.
08:52 So just to give you a few examples--
08:54 and of course, it requires a proactive push.
08:57 So in terms of the innovative things,
09:01 I don't want to talk of the large risk.
09:04 But coming to the basics for the retail customers,
09:07 I think one of the very significant turning points
09:10 in India was when Modi ji linked the bank accounts
09:16 and offered this Jan Dhan Yojana.
09:20 And for 12 rupees, a person could get an insurance cover
09:25 and a personal accident cover.
09:27 And you could also get a death cover for 2 lakhs,
09:31 and which is not a mean amount.
09:33 And linking this, first of all, bringing
09:36 the entire population of this large country
09:40 into the banking system, and then linking this
09:43 by offering a very, very low cost product,
09:47 I think it was significantly a game changer
09:49 and earned our respective Prime Minister Modi
09:52 ji a name in the Guinness Book of Records
09:56 as the largest insurance agent.
09:58 That coming to 2020, right in February or in March,
10:02 when there was a sudden--
10:04 on 20th March, there was a sudden lockdown
10:06 which was declared.
10:08 And there were a set of companies
10:11 who were ready to--
10:13 with their work from home or the BCP kind of a thing.
10:16 But what's interesting is how the insurance sector reacted
10:21 to this situation.
10:22 I have not seen a single insurance
10:26 claim of any client of ours getting delayed.
10:30 In fact, the claim settlement has been from--
10:33 Awesome.
10:33 --absolutely to the team, absolutely no customer
10:37 complaint.
10:39 And it has been a wonderful experience.
10:42 I would say that this is how the ecosystem pushes this industry
10:47 and has created this industry which is so reactive and so
10:50 customer-centric.
10:52 So there were all sorts of--
10:54 and of course, let's not forget here
10:56 to add regulators' role in this, through signatures
11:00 and e-policy insurance for retail clients
11:03 and improving the pre-loan period.
11:04 So as an entire industry, I think
11:07 we have shown to the common man that this
11:10 is an industry which is going-- which
11:12 is with you in thick and thin.
11:14 And we have gained a lot of customer trust and confidence
11:18 in the bargain.
11:21 And I'm very proud that I'm part of this industry which
11:24 has come out.
11:25 And then, of course, down the line,
11:27 we have seen very quickly the first product which
11:30 was announced at the behest of the central government
11:33 was this very innovative product for the frontline workers
11:36 that, if God forbid anything happens to them,
11:38 there was a 50 lakh insurance which was
11:41 given to the next of the kin.
11:43 I think that was a great confidence booster.
11:45 Can you imagine in those early days
11:47 when we were not even sure what's going to happen?
11:50 And New India came out with this product.
11:53 And thereafter, again, with the regulators,
11:55 push, there were COVID-19 insurance,
11:58 a standardized product.
12:00 And we have seen so quick these developments have come in.
12:04 And given the customers that confidence
12:06 that this is an industry, I need to--
12:09 I can tell you that the number of retail sales which we are
12:13 seeing has gone up dramatically.
12:16 What it did to the penetration and what role
12:19 did distribution play on that?
12:22 I would invite a few more comments.
12:24 You also made another very interesting point
12:27 on the sharp reaction which has been positive reaction
12:31 by the regulator and the industry
12:33 in terms of coming up with COVID-specific products.
12:37 And I think that was that tipping point
12:40 that industry reached.
12:42 And Subit, I will come to you.
12:46 In terms of distribution and this pandemic,
12:50 do you believe that--
12:52 so Rashmi touched upon the point of the servicing part of it
12:55 where the claims were getting settled to the team.
12:59 I am very, very keen to know what role did distribution
13:04 play with emerging models, not just the conventional models.
13:11 What role the distribution models play in pandemic
13:16 situation, I would like to invite your comments on that
13:20 because you would have seen that from the very close quarter.
13:23 What do you submit?
13:24 So basically, insurance was always a forced sale product.
13:28 So post-pandemic, I think there was a lot of pull.
13:31 People realized that there is a need of insurance.
13:35 And there was inbound calls.
13:37 So this is the first time where people used to call and ask
13:40 about insurance, ask about specific products.
13:43 And thanks to the regulator, thanks
13:45 to the insurance company who adopted things very quickly,
13:49 they came out with online products.
13:51 They came out with-- so insurance, you generally
13:54 have to fill up a form.
13:55 There is a proposal form which needs to be filled.
13:57 Then it goes to the insurance company.
13:59 Underwriting happens on that and all that.
14:01 So everything became digital.
14:04 And people used to underwrite the policy
14:07 on a click of the button.
14:08 Things used to move on the mail.
14:10 And I think-- I was talking to so many people
14:14 where people had absolutely no work.
14:16 People were under deep stress because what
14:18 to do for six months?
14:19 We had to be locked up.
14:21 And we had a situation where we used
14:22 to start the work at 7 o'clock in the morning
14:24 and we used to work till 12 o'clock in the night.
14:26 So our hands were full.
14:28 And we had a growth.
14:30 We had a marvelous growth.
14:31 We had a 22% growth in the first six months
14:33 compared to last year.
14:34 So this is what has been the situation in the last six
14:38 months.
14:38 So yes, coming to distribution model,
14:41 obviously the distribution model,
14:43 we do not have an online model.
14:44 But we had an offline with our team
14:47 where they used to connect on phone, on calls, on Zoom,
14:51 on various kinds of platform which were available.
14:54 And they used to connect.
14:56 And I think we targeted the corporate customers where
15:01 maybe they didn't have a health insurance
15:03 or they didn't have a term life policy.
15:05 So probably the penetration or the depth
15:08 increased over a period of time.
15:10 And people realized that insurance is a necessity.
15:13 That's a great point that you made.
15:15 And that's so much reassuring to know that.
15:19 I think when people require information, all of you
15:23 provided so much of information.
15:24 I think for the first time, people
15:26 wanted to know about insurance.
15:28 They did not run away.
15:29 They did not rely on whatever the agent was saying.
15:33 It was good to see that people were
15:34 curious about the features of the product.
15:37 That brings me to Vinkat Yuv.
15:40 You actually represent the distribution fraternity
15:43 at regulators' office.
15:45 And that's a huge responsibility.
15:49 I actually have a very, very curious thing
15:54 that I keep hearing at different levels.
15:57 Regulators came up with this concept of point of sales.
16:02 And everybody thought it's a great distribution innovation
16:06 in a country like India, where our populations are
16:10 in deep rural and very less penetration has happened.
16:15 Wanted to know in pandemic, this point of sale
16:19 or any other particular distribution model,
16:22 do you think they played a role?
16:24 Or do you think that emerged as something?
16:27 Digital definitely did.
16:28 Like I think Rashmi and Mr. Bura, both of them
16:32 have mentioned that digital definitely
16:35 got adopted in a big way.
16:37 Will happen.
16:38 But these new things of the point of sale,
16:43 or let's say the para-bank insurance kind of a thing,
16:47 cooperative bank, or even in broking,
16:50 did you see any remarkable change happening?
16:53 What are your views, Vinkat, on that?
16:55 OK, let me start with thanking IRDA.
16:58 By taking quick actions and giving the right advice
17:01 at the right time, on time, to the industry,
17:05 to the distribution channels, and all the insurance
17:09 fraternity.
17:10 For example, when pandemic started,
17:13 it immediately studied the situation.
17:15 And IRDA gave all the insurers to design a product,
17:19 and use it, and then file it.
17:21 Usually an insurance product, any insurance company
17:24 has to file before the regulator.
17:26 Then they get the permission, and they
17:28 have to start distributing the products.
17:31 But because of the pandemic, there is no such time.
17:34 Immediately that IRDA advised to all insurers
17:37 to design the product, then after that,
17:39 to get the permission.
17:41 Such a way that a lot of COVID policies were sold out,
17:45 some close-up policies sold out.
17:48 And it is very good initiative by IRDA,
17:51 and immediately response from insurance companies.
17:54 It has really helped distribution channels,
17:57 agents and brokers also, a hand-on product
18:00 to take care about their client segment.
18:03 That really helped.
18:05 The second point which you asked is that the distribution
18:11 network, yes, that is also I really
18:14 thanking IRDA for providing that point of sales concept.
18:22 The point of sales has really helped.
18:24 If you can observe, there are around 400 plus insurance
18:28 brokers in India.
18:30 There are 1.8 million agents in India.
18:34 There are approximately 55 insurance companies in India.
18:37 All these companies, all these insurance brokers,
18:40 surprisingly, some of the insurance brokers
18:43 recruited more than 15,000, 20,000 POS, point of sales.
18:47 That means those many agents came
18:50 into the ambit of the distribution channel.
18:53 They don't need to work full-time.
18:55 But whatever the geographical area they live in,
18:58 to whatever the community they live in,
19:00 just one person can survive.
19:02 One person can manage within 10, 15 people or 10, 15 companies.
19:08 That kind of ambit was good last two years.
19:10 That really helping insurance industry for its penetration.
19:15 Like that, apart from the digital model and technology,
19:20 you know that a lot of Indian people, the community,
19:26 unless they feel, they touch, they see, they don't believe.
19:31 Now also, the technology really helping
19:33 to make it easy of either a broker or an agent job.
19:39 Last one year, if you see that particularly after COVID came,
19:43 a lot of medical tests are happening
19:45 through telemedicals, through digital checkups.
19:49 And all the certificates are issuing.
19:51 And customers are uploading their KYC documents
19:55 and their medical reports, everything online.
19:58 Through mobile phone, they're uploading.
20:00 This is really helping a distribution channel
20:02 for agents and the POS and the brokers.
20:05 Their job is making it easy.
20:08 And they can focus on more number of clients.
20:10 And this is really helping.
20:12 And what I'm saying is, it's not enough.
20:17 There is a lot more things to come.
20:19 But coming to international market,
20:21 we are nothing lesser than reaching out,
20:25 penetrating insurance business and reaching out to the client,
20:28 nothing lesser than.
20:29 Only one area need to really develop is customer service.
20:35 -We'll come to that.
20:36 I'll come to the international market and the customer service.
20:40 Before we go there, I just want to build upon the point
20:44 that you mentioned, a very interesting point
20:46 that you touched upon.
20:47 The hiring of POS by the brokers.
20:51 And that's a very interesting point.
20:54 And I can't leave that because I wanted two other experts also
20:59 to comment on that.
21:02 Is that the new emerging distribution model
21:06 that you see for India?
21:08 And Rashmi, the question for you,
21:12 do you see a shift in the age of the customer
21:16 who are now entering the insurance purchase?
21:21 Do you also see any new set of distributor
21:26 coming and joining this industry?
21:29 Is there any good news on that?
21:31 Because I come from a background where
21:33 I have seen insurance on the health or non-life side,
21:37 nobody would purchase unless and until it is mandatory.
21:40 On the life side, an agent or a broker or somebody
21:45 has to be influential to sell insurance.
21:49 From there to this shift, what are your thoughts on that?
21:52 -Just to add to what you're saying,
21:54 life insurance has been sold totally on the back of tax.
22:00 So it is a very efficient tax rebating thing.
22:04 And that is the entire success.
22:07 Nobody went and bought through activity saying that,
22:10 oh, I need to-- there is a risk, and I need to secure my future,
22:14 et cetera.
22:15 The driver was this.
22:17 So in our country, honestly, there
22:20 have been various other drivers.
22:22 So for my life, the driver was tax.
22:25 Unfortunately, for non-life, there
22:27 were two things which were not really in their tax benefit.
22:32 And the second one was that all the contracts
22:35 are annual in nature.
22:36 So you can imagine the plight of an agent who is vis-a-vis
22:39 an agent selling a life product.
22:41 The non-life agent, his cycle of renewal is just 10 months,
22:45 and then he has to again go back.
22:47 And comparing that, the logistics really
22:50 were not really conducive.
22:52 But thanks to, as I mentioned earlier,
22:55 that being ecosystem-driven, so one
22:59 has seen a tectonic shift which is happening.
23:03 And all these new models-- so coming
23:05 to what you're specifically saying, point of sale.
23:08 Well, so bank for sure is one channel to which people
23:12 have been reaching out.
23:13 But this point of sale was another very innovative way
23:16 where the retail customer was able to have
23:20 a physical interaction.
23:22 And these POS served a very important last-mile connectivity
23:28 with the end customer.
23:29 And I would say to that extent, any of these channels,
23:33 I would say that in terms of the last-mile connectivity,
23:37 there is no better person than a postman in our Indian scenario.
23:43 And I understand this India Post Payment Bank,
23:47 when it was launched, I was in the inaugural function,
23:51 which was inaugurated I think three years back
23:53 by Motu G in Delhi.
23:55 And the vision which was dreamt was that Dakhiya
24:00 Dak Laya, and along with him, he's
24:02 carrying a little mobile instrument with him.
24:05 So there is a little bit of a slowness which has come in.
24:08 But India is full of these kind of innovations.
24:11 Because here is your post office.
24:13 And from post office, this Dakhiya
24:15 is going to your house to house.
24:17 He has the trust.
24:18 What do you need for insurance?
24:20 Trust.
24:21 So a person is giving you cash, because money order cash.
24:24 You can obviously trust him to give your insurance premium,
24:27 because he's going to give you a receipt immediately.
24:30 So there are models and models.
24:32 And India is such a vast and diverse country.
24:36 I think we will want all of these.
24:39 And coming to the other segment, the younger generation,
24:44 obviously for them, again, because the lifestyle,
24:49 the experiences which life is teaching them,
24:53 the mental, physical, the emotional wellness,
24:56 all these things are pushing even the younger generation
25:00 towards insurance.
25:02 And for them, insurance has to be click mode.
25:06 They cannot be bothered.
25:07 They have no time to be a broker or an agent.
25:10 So if we are catering to that end of the spectrum
25:15 and this end at the POS level and here on the digital,
25:20 I think we are very well-poised to reach out
25:23 to all these consumers in our vast and diverse country.
25:27 That's what I think.
25:28 That's very reassuring to hear.
25:30 And one more controversial point on that.
25:34 So one school of thought says--
25:36 and pardon my saying so.
25:39 Like I promised to the viewers, I'll be very candid.
25:42 So on one side, we see that postal life insurance,
25:48 if not failing, it was not that successful,
25:51 let me put it mildly.
25:52 I will actually debate over the fact
25:54 that in an age where every payment is becoming digital,
26:00 people have forgotten how to write letters,
26:03 those postcard in-land letters that we do not exchange.
26:06 All we exchange these days are WhatsApp messages.
26:09 I'm sure you all got flooded during Diwali
26:13 with your messages.
26:14 And we don't mind.
26:15 That's convenience, right?
26:17 I wanted to build on that point.
26:19 Where should all of us in the industry and the regulator
26:22 and the council bodies and forums like this
26:26 should focus the energy on?
26:28 Sumit, I wanted your reaction on this dilemma between rich
26:35 physically and rich digitally.
26:39 In a situation where world across,
26:42 not more than 9% of sale happens digitally,
26:47 in a country, we actually discussed
26:51 that people who are active on WhatsApp and internet
26:56 coverage wise today, 95% of Indian villages
27:00 have the access.
27:01 So where should the effort go?
27:03 Sumit, over to you.
27:04 Very keen to hear from that, your candid answers.
27:06 So basically, the whole spectrum
27:10 is divided into two as far as the retail model is concerned.
27:13 One was the online model, which was initially not successful.
27:18 People would not jump into the online mode
27:20 and buy the product as insurance products were complicated.
27:24 And it was not easy to understand.
27:26 So I think IIT had thought about this.
27:28 And then came the POS model.
27:30 So the POS model was a hybrid model
27:35 where they would get a handheld device
27:37 or where they would be digitally supported in terms
27:41 of quotation, in terms of pricing, and all that.
27:44 And they would complete the transaction.
27:46 So the POS model made that gap or bridged that gap.
27:52 Secondly, even on the online model,
27:55 maybe the online model was for people from 20 to 30 or 20
27:59 to 40.
28:00 So what about people who are above 40?
28:02 So probably the last mile delivery,
28:05 which we call from a POS model, which actually
28:08 helped to bridge this gap.
28:09 So I think the landscape has changed
28:12 and the distribution model changed.
28:15 And POS has really helped changing the distribution
28:18 model.
28:18 I have one follow-up question to that, Smith, before I leave.
28:22 On the regulation side, I keep hearing a lot of stories
28:25 about market conduct.
28:27 Wanted to know your view.
28:29 When we are having new models of--
28:32 new emerging models of distribution,
28:34 do you see any regulatory challenge on that?
28:37 Do you see something getting diluted?
28:39 On one side, Rashmi made a very important point,
28:42 that today's Denny Zains, the Zain Zee, would not like hassles.
28:47 They would like to have one-touch solution.
28:49 And I completely agree with that.
28:51 Customer empowerment is the key.
28:54 But is there any challenge on market conduct?
28:57 Do you think revances will go up, down?
29:00 Do you think people will be able to handle this properly
29:03 in this empowerment?
29:04 Is India ready for that empowerment?
29:06 Smith, your views.
29:08 So yes, as you know, the brokers were always regulated,
29:12 and highly regulated.
29:14 And they always represent customer.
29:16 We actually run a very high risk,
29:18 because we are liable for any mistake which
29:21 has been committed, maybe on behalf of an insurance
29:24 company, towards the client.
29:25 Whereas any other model, if you take the agent,
29:28 or the marketing firm, or an insurance company,
29:32 the insurance company runs the risk.
29:34 So yes, when we come to these kind of models
29:36 where a POS who is just a 12th pass,
29:40 he may not be that equipped.
29:42 Or maybe the grievances may increase,
29:44 because he is not put across the product in the right manner.
29:49 So it is our duty as a broker who's appointing the POS,
29:53 that a proper training system should be there.
29:55 A proper modeling should be there.
29:58 And if we are giving them a digital platform,
30:01 we should make sure that it is an AI-based digital platform,
30:05 where the questions are being prompted,
30:07 depending upon the situation, or depending
30:10 upon the PIN code mapping.
30:11 So that will actually increase.
30:13 So we have seen one case where on the usage of that model,
30:19 the questions are being popped up to the POS,
30:23 this is the PIN code, so that he can
30:25 ask the appropriate questions to the customer,
30:28 take those answers, and give that product to him.
30:31 So probably the world is moving towards that.
30:34 We need a bit more innovation in digital selling.
30:37 That's a great point, where digital is getting supported,
30:42 and physical is getting supported,
30:45 and they are not competing, but they are in a way
30:49 complementary to each other.
30:50 And that's where possibly we should call them
30:53 physical selling.
30:54 And India is absolutely OK with that.
30:56 We know English.
30:57 So we are absolutely OK with physical, right?
31:00 That way.
31:01 Because I have a question--
31:02 I'll give you an example on an AI.
31:04 So suppose a person goes to sell a motor policy.
31:08 Now there are a lot of covers which
31:10 are add-on to that motor policy, like a zero depreciation
31:13 cover, and an engine cover, and xyz.
31:15 And suddenly that guy asks him, why
31:18 should I buy an engine cover?
31:19 Generally, an engine cover is bought
31:21 where you see a lot of floods happening,
31:23 or there are situations where there is ingress of water
31:28 in the car and all that.
31:30 Now who decides whether I need to buy an engine cover or not?
31:34 So the AI will help to understand
31:37 through that pin code whether this area gets
31:40 flood or torrential rains, which can lead to this situation.
31:44 If the answer is yes, it will pop up that yes.
31:47 In this pin code, you need to buy an engine cover.
31:51 Super.
31:51 That's a great point.
31:52 So this is a kind of innovation.
31:55 Because as you said, the grievances
31:58 may increase when we give too many distributors,
32:02 or too many people to distribute the product.
32:05 But then we need to enable them in such a way
32:07 that the grievances reduce, the mistakes reduce.
32:11 That's a great point.
32:13 Venkat, I'll come to you with the ease of distribution
32:17 and the product story.
32:19 You have sold insurance sitting before the customer.
32:24 And I want to borrow from your experience.
32:27 So there is one set of product which
32:29 is almost like a very simple, easy to understand,
32:32 easy to go product.
32:34 The other product is very technical.
32:36 And I think customers struggle to understand,
32:39 and they are a missing story.
32:42 Do you think that we have enough product?
32:46 And you were talking about international market, Venkat.
32:49 I wanted to bring your point of international market.
32:53 Is India matured, ready enough to have
32:57 international level of product?
32:59 And should there be any distinction
33:01 on the distribution about who sells what?
33:04 What should be the complexity of the product?
33:07 And can technology, like Sumit also mentioned, support it?
33:10 So what's the product story according to you, Venkat?
33:13 Yeah, what I'm saying is that India
33:15 is nothing lesser than any country in the area
33:18 of developing the product.
33:20 Definitely, we are almost like at par
33:23 with the advanced countries, except some small areas
33:27 that we need to improve.
33:28 Definitely, that also will come.
33:31 So first, for example, that I am the member of one
33:34 of the study council in the USCA,
33:37 and for designing the new product
33:39 and advising the insurance companies.
33:41 So in years, five years back, when
33:43 I am in the committee member, there
33:45 are 2 million people who crossed 100 years of their age.
33:50 And out of 2 million people, 70,000 people
33:52 are still driving their cars.
33:55 But unfortunately, no insurance company
33:57 is taking care of them.
34:00 There is no pension coming to them,
34:01 because mostly the insurance company products
34:04 are taken care of by human life values, a maximum 100 years.
34:09 So fortunately, that whatever our company
34:11 given the advice and whatever the rate ups we've given,
34:15 fortunately, the three of US insurance companies
34:18 came up with innovative products.
34:20 The New York Life Insurance in USA
34:22 came up with innovative product, giving the pension
34:25 annuity to the employees, the members, the customers,
34:29 up to 121 years.
34:32 That kind of innovative product they came up.
34:34 Like that, the innovation, the development, the growth
34:39 is not ending up at one point.
34:42 It keeps on evolving, keeps on evolving.
34:45 It never stops.
34:46 Based on the needs of the human life, the needs of the industry,
34:51 it keeps on evolving.
34:54 But coming to India, compared to the India market, what
34:57 I strongly believe is the servicing and claim settlement
35:02 easiness that really need to be compared to foreign markets,
35:10 we need to improve a lot.
35:12 Our systems and our processes, we really
35:15 need to innovate a lot of in-depth
35:19 to evolve such a way that the customer will
35:21 feel that it is so easy.
35:24 Then automatically, the main subject of this meeting
35:28 was the penetration of insurance industry.
35:30 Once the customers see the real benefit of insurance
35:35 with ease, without talking to anybody,
35:38 without going to anybody's office,
35:40 without doing the number of checkers in the insurance
35:44 company office or agent's office,
35:46 with ease, if they can get the claim,
35:50 definitely penetration will improve like double-edged spade
35:55 actually.
35:55 Thank you so much.
35:56 Thanks for the observation.
35:57 Rashmi, I'll quickly come to you building
35:59 on that point of customer.
36:02 I will refer history a little.
36:04 And I don't see any better person than all of you
36:08 to comment on this.
36:10 Detariffing was an approach-making incident
36:13 for the industry.
36:14 And everybody was curious to know what
36:18 will happen to the customer.
36:20 And in a country where we just heard from Sumit,
36:24 the extent of complexity in motor insurance,
36:28 where most of the people would not understand what is--
36:32 or why is engine insurance is required
36:34 and how is technology supporting that.
36:38 I wanted to know, with all these changes,
36:41 do you believe that customers are getting more?
36:45 Do you believe that industry is sustainable now?
36:49 And that's a very tricky question.
36:52 We are getting so much of investment on technology.
36:56 The margins are going down for everyone.
36:59 Now, while everybody talks about customers,
37:02 I actually would encourage all of you
37:04 to think of the stakeholders, including
37:05 shareholders and distributors.
37:07 They need to make money.
37:09 Because if the industry has to thrive,
37:12 these people are extremely critical for making money.
37:15 Otherwise, no one will bet on this country.
37:19 Do you think customer experience, customer richness,
37:23 or the customer's right purchase has increased
37:27 with all these changes?
37:28 Your two words on that.
37:32 So, Amit, thanks for raising this point.
37:35 And yes, the detarification was brought by the regulator
37:40 as a sign of the opening of the maturity of the insurance
37:44 market with the new wave insurers coming in
37:47 so that the customers get the right product
37:50 at the right price.
37:52 But what did we see on the ground level?
37:54 We saw complete mayhem.
37:56 We saw complete immaturity.
37:58 And we saw the rates sliding down
38:01 to 1% of what they were earlier.
38:04 So obviously, it was not sustainable.
38:06 And it led to insurers bleeding and burning their balance
38:10 sheets.
38:11 And it was very skewed, I would say,
38:15 because even the new products could not
38:16 be sustained in such a scenario.
38:19 So it did not benefit anyone.
38:22 And we have to now come back to this scenario
38:25 where the regulator, through their intervention
38:29 and through the national reinsurer,
38:31 we are coming to the IIB rates, which is a sort of parrot.
38:37 So the point I'm trying to make is
38:39 that if you are given freedom, the freedom
38:42 has to be with a lot of maturity.
38:45 Otherwise, that freedom is going to haunt.
38:47 And if all the stakeholders' interests are not aligned,
38:51 then the model cannot sustain.
38:54 So for a good, sustainable model, we have to insure.
38:58 And I'm very proud to say that as brokers,
39:01 we play a very good balancing role, where
39:03 we insure that while we are taking our clients'
39:07 requirement to the insurer, we are also
39:10 hearing what the insurer has to say.
39:12 Because what if my insurer, the blood bath of price,
39:16 gives me a cheap rate, but is not
39:18 able to service this claim when it comes?
39:21 So what is that insurance for?
39:23 And I'm talking of commercial insurances,
39:26 where for a premium of maybe a couple of lakh of rupees,
39:30 the sum assured could be multiple hundred crores.
39:34 You can see the value at risk and the exposure.
39:37 So we always, as brokers, try to balance that thing
39:41 and tell the customer that, look,
39:43 your insurer should be solvent to pay and honor your claim.
39:48 You don't buy an insurance as a piece of paper.
39:53 So it has to stand in front of the litmus test
39:58 when the time of need comes.
40:00 And I'm very happy to say that the insurance companies
40:03 actually pay out thousands of crores of claims
40:08 by collecting such minimal premium.
40:10 And they are doing a very good job
40:13 of supporting the innovation and the growth of the economy.
40:17 Can you imagine if there was no insurance, who
40:20 would have encouraged the entrepreneurs?
40:22 Who would have fueled this whole risk-taking
40:24 so that the entrepreneurs can go and do innovation,
40:27 can go and run their businesses, can run their oil refinery,
40:31 can fly an aircraft?
40:33 Who does all that?
40:34 It is the insurance industry.
40:36 So we have to ensure that they remain solvent
40:40 and there is a balance which is there.
40:42 And look after their interests as well.
40:44 I like that.
40:45 And this is something which keeps
40:48 bothering me as a professional from the industry
40:52 that are we on the right direction?
40:54 I mean, don't get me wrong, but all these talks
40:58 about customer experience, very cheap products,
41:01 and variations of product, and reaching out
41:04 to different models, I actually worry about the shareholders.
41:08 And I actually worry about the distributors.
41:10 Having worked on distribution for a long time in my career,
41:13 I am a firm believer of the fact that unless and until these two
41:17 stakeholders are healthy, are well-fed, are nurtured,
41:22 the long story of insurance cannot be good.
41:25 And we are a country--
41:26 and with that question, I want to come to Sumit now.
41:30 We are a country which is being looked
41:33 at as the country of future, at least definitely
41:37 in the next couple of decades.
41:39 Everybody is bullish about India.
41:42 Now, the insurance-- like Rashmi made a very important point
41:45 that for the growth of the country,
41:48 the insurance sector has to be robust, has to be profitable,
41:52 and has to be sustainable.
41:55 Now, in a scenario like that, we also
41:57 see, Sumit, the stress on the P&L.
42:01 And I refer to the 100% loss ratios that we see.
42:05 The solvency is a challenge.
42:07 And I will not name it, but we all
42:09 know the biggest of the names are on stress.
42:13 So what's the story of that?
42:14 And as a professional, how do you feel about it?
42:19 Is there a worry for all of us?
42:22 Yeah, so basically, post-de-tariffing in 2008,
42:25 as Rashmi said, the prices crashed.
42:28 And maybe initially, the public sector companies
42:31 had enough reserves to burn the money.
42:33 And they also participated.
42:35 And everybody made merry in achieving the top line
42:39 and gaining the customer support.
42:40 But slowly, I think everybody lost the plot.
42:44 And they forgot to create the kind of reserves
42:47 which are required.
42:48 Now, if you see insurance as a sector,
42:51 you can only write a risk if you have enough capital.
42:55 So the risk is actually related to capital.
42:58 And if you don't have--
43:00 so you have a limited capital.
43:01 And then you build up through reserves.
43:03 And you build up those capital.
43:05 Now, if you don't create that kind of reserves,
43:08 how can you have an appetite of writing a risk?
43:11 So if you don't create a reserve,
43:13 the appetite is not there.
43:14 Then you have to do a reinsurance.
43:16 And the money goes out of the system, out of the country.
43:19 So you need to build enough reserves as an insurance
43:23 company to absorb the risk in the country.
43:26 I think this is a very pertinent point, which
43:29 the insurance companies have missed out in this rat race.
43:32 Secondly, we definitely, as brokers, represent customer.
43:36 And we need to look at, from a customer's perspective,
43:39 in terms of giving them the best price and the best cover.
43:43 But at the same time, I think it is our responsibility
43:46 to make sure that we balance it out.
43:49 We cannot offer rates of peanuts and insure,
43:53 as Rashmi said, thousands of crores of risk
43:55 at a very small lax of rupees of premium.
43:58 And when it comes to claim, insurance companies
44:01 should not have that kind of vision,
44:05 where they feel that we have charged peanuts.
44:07 So why do we pay that kind of huge, large risk claims?
44:11 So I think there needs to be enough premium in the system
44:14 to service the claim.
44:16 And I think the customer experience will only
44:19 improve if insurance company has money.
44:21 Because without money, the experience cannot come in.
44:24 Very true.
44:24 Very true.
44:25 Very true.
44:26 Venkat, I would like to come to you with your quick 30
44:30 seconds run on.
44:31 What is the wish list from the regulator?
44:33 Like you all said that regulator has done a fantastic job.
44:37 In distribution, do you think the commissions are enough?
44:42 Do you think the commission should go down, go up?
44:45 What should happen?
44:46 So what is the wish list from you, Venkat,
44:48 as a professional?
44:49 Definitely the commission has to literally grow up
44:52 because the intermediary role is day by day, day by day
44:55 increasing.
44:56 The cost of intermediary to sustain the intermediary,
45:00 either it is agent or broker, the expenses and that lifestyle
45:04 and the innovative things in customer service
45:07 and acquiring the business, the cost
45:09 is really increasing day by day, day by day.
45:12 Definitely I say that it needs to be increased.
45:16 And I already also given some kind of instructions
45:20 to free up the commissions also at certain level.
45:24 But some of the insurance companies are implementing.
45:26 Some of the insurance companies are not implementing.
45:29 Compared to the Western market, it
45:34 is predominantly the huge difference.
45:37 In US, that is a life insurance policy,
45:40 the intermediary will get 100% to 125% commission.
45:44 Here, we restricted to 35%.
45:47 And there is a lot of expenses there.
45:49 And if it is decreasing, definitely that industry
45:54 won't survive and intermediaries won't survive.
45:58 And even the regulator also knows it.
46:01 And they are also studying it in future
46:03 that I hope that they will put a right focus
46:06 and right advisory on that.
46:07 Then definitely that will fulfill
46:10 the game of the penetration of insurance industry in India.
46:14 Rashmi, I wanted to know your quick bits on--
46:19 so much is hyped around sandbox.
46:21 And pardon my saying so, have we seen enough out
46:27 of that sandbox experiment?
46:29 Is it on the right track?
46:31 Yes, no, if it is not.
46:33 What is the wish list for sandbox?
46:36 OK, my quick take on that, sandbox,
46:39 to the best of my knowledge and information,
46:42 hasn't really done something very earth shaking.
46:45 And yes, there has been very minimal,
46:50 I would say some perfunctory kind of applications
46:54 went up and down.
46:55 We saw some new products like a drone insurance
46:58 or some such things come up.
47:01 But I would say that brokers should also
47:04 be allowed to participate in the sandbox.
47:08 Because the intermediaries represent and know exactly
47:13 what the customers want.
47:14 And excluding or not, I mean, it's not that we are excluded,
47:19 but we are not invited to participate.
47:22 So I think there is a big gap there.
47:25 And instead of focusing, what I have seen
47:28 is in the round of sandbox, only the fintech companies
47:32 have currently participated.
47:34 We are already seeing a plethora of fintech,
47:37 which is already invaded or pervaded into our industry.
47:41 You see all the payment gateways and all of these things
47:44 which are happening.
47:45 But in terms of the product innovation,
47:49 nothing really has come out of the sandbox.
47:51 And I think if brokers are allowed to participate,
47:54 you will see the real, actually product innovations.
47:58 These are all what are coming out of the process innovations.
48:01 This will only go about in reducing the infrastructure
48:05 cost of the insurance companies.
48:07 It's not going to really directly link
48:08 to the customer or something.
48:10 And all this talk of customer experience,
48:13 I just wanted to add my one point here,
48:15 is that you have to be very mindful of a couple of things
48:19 here.
48:20 Insurance is a very tangible product.
48:22 It is a serious business.
48:25 We cannot afford to have mis-selling happening
48:29 under the garb of simplicity.
48:31 And bundling in and tagging in and making insurance
48:35 as I'm buying online some product
48:38 and I come stitched in with health insurance.
48:42 Now, can you imagine how generic that product would be?
48:46 So we have to be careful what products we are selling
48:49 and also which channels.
48:51 If I'm going to a supermarket and I'm buying my grocery
48:53 and somebody is coming and saying,
48:55 oh, your grocery purchase is more than 1,000,
48:57 I'm giving you an accidental insurance.
49:00 I find these kinds of offerings very gimmicky
49:03 because neither the customer will remember
49:06 that when I bought groceries, somebody gave me a PA cover.
49:09 It's not going to go into the waste bin.
49:11 So let's take it a little more seriously
49:14 and with a little bit more information while transacting.
49:18 And the second thing is that in this ease of doing business,
49:22 there is again another hole which is there
49:26 is all the data security and data privacy.
49:29 Just to get all of us know that when these telecom companies
49:34 came in and multiplied and mushroomed,
49:36 the amount of calls, unsolicited calls, each one of us
49:39 would get because the same database was moving from one
49:44 to the other to the third company.
49:47 So this is again a big, big exposure which is there.
49:51 And I think we all need to be mindful
49:54 because we receive unsolicited calls
49:56 where the person knows your name, your age, your sex,
49:59 where you are working.
50:01 So much of personal information is there.
50:03 And randomly to have everyone sell everything online
50:08 is again a big risk exposure.
50:10 - Thank you so much for being so candid.
50:12 Quickly coming to Sumit,
50:13 your wish list from the side of the customer,
50:15 you represent the customer,
50:17 you also represent the broker's body, right?
50:20 So what are your wish list?
50:23 You know, a couple of things very quickly
50:24 if you can talk about it.
50:26 - I think the customers as you know,
50:28 there is a trust deficit in the system,
50:30 which everybody knows.
50:31 And I think insurance company and the brokers
50:34 and everybody involved in the ecosystem
50:36 need to bridge that gap of trust.
50:38 So whatever money we are taking from the customer
50:41 is as a custodian.
50:42 We need to remember that we need to give them back
50:45 in terms of need.
50:46 And I think there is some gap which is there
50:49 where people don't come forward and buy insurance.
50:52 So I think there needs to be something,
50:55 something needs to be done to fill that trust deficit.
50:59 And I think that can come with some kind of innovation
51:02 like maybe, you know,
51:05 we generally have an indemnity product,
51:06 but we need to come with a benefit kind of a product
51:09 where people buy something on detection of XYZ,
51:12 you get that money.
51:13 Without any hassles, without any lengthy paperwork,
51:16 if people get the taste of getting back that money,
51:19 I think that will go a long way in making customer happy
51:24 and customer being close to the insurance company
51:28 or to the intermediary.
51:29 - Great points, great points.
51:31 So ladies and gentlemen, like you saw, you know,
51:33 I think last about 60 minutes or so,
51:36 these, you know, terrific points
51:38 that has been mentioned by these experts
51:40 and I know all of them.
51:42 So I can tell you that we can go on and on and on
51:45 for another 10 hours and they will be very candid.
51:48 (laughs)
51:49 And they have been so candid.
51:51 So thank you so much panelists for your frank views.
51:56 It was really engaging.
51:57 It was really informative.
51:59 And I must also say that thanks Outlook
52:02 for organizing such a great discussion
52:05 on distribution channels and the emerging story around it.
52:09 So we sign off for today,
52:11 but with the message that this great country
52:14 is in for a lot of positive things.
52:18 All the experts mentioned the great things happening
52:21 for the industry, the support of the regulator,
52:25 the way the companies are maturing,
52:28 the way in spite of pandemic challenges,
52:30 the claims were honored.
52:32 So all positive story.
52:33 There will be challenges like every time we have faced,
52:37 but I think all said and done,
52:39 (speaks in foreign language)
52:41 So we'll leave with those promises.
52:43 Thank you so much, everyone.
52:45 Thanks for joining.
52:46 - Thank you.
52:47 - Thank you for hosting us.
52:48 - It was a pleasure.
52:49 (upbeat music)
52:52 (upbeat music)
52:54 (upbeat music)
52:57 (upbeat music)
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