Gone are the days when life insurance was only about agents. Today, customers are reaching out to life insurers and directly buying policies. Yusuf Pachmariwala, leads operations (customer services and service excellence), Tata AIA Life. He joined Tata AIA Life in 2001 and since then has held varied portfolios in operations and distribution. This long tenure has given the veteran a unique vantage point in terms of witnessing the evolution of the life insurance industry. In an interview to Kumar Shankar Roy, Yusuf Pachmariwala, who is executive vice-president & head, operations, Tata AIA Life, talks about how life insurance operations have changed over the past decade, how online and offline have carved their own niche when it comes to selling and why technology-backed innovations that have driven the company's highest individual claim settlement ratio and scorching pace of growth in absolute retail protection premium.
Operating a life insurance company has changed over the years. Can you tell us what it was like 10 years back and how is it now?
The life insurance industry has come a long way in the last 10 years. Consumers are beginning to recognize the need for financial protection more than before and are looking at it as an essential component of their financial portfolio. Companies like Tata AIA are more focused than before on meeting consumer needs at every life stage. The focus is more on need-based solutions and on making the on boarding process more transparent, easy and hassle-free.
In the sphere of policy purchase, the process in the past involved extensive paperwork and was carried on in the backend. The consumer would see only the final product. Today, the process is more transparent as it has turned digital. This has drastically reduced the turnaround time and made the consumer more aware and inclusive in the process. Even though consumers prefer the traditional method of purchase, online sale of life insurance too is beginning to gain ground.
In post-sale services, earlier, there was dependence on agents, branches and call centers for query resolution, clarifications as well as premium payments. With online portals, SMS services, Interactive Voice Response System (IVRS) and Social Media Chatbots, making premium payments and accessing information has become easy and swift.
In customer relationship management, we now proactively manage consumer expectations based on experiences we have had with them. For example, the premium certificate for tax filing, bonus statement, anniversary statement, maturity process are now made available to the consumers proactively, i.e. without the customer having to ask for it.
In claim settlement, we recognize the sensitivity involved in the claims process and therefore try to make it as simple and easy as possible for the claimants. The claim documentation has been simplified and can be accessed and submitted electronically.. Also, claims are getting settled a lot faster. Today, we process over 90% of claims within 3 days.
Online has become not only an influencer but a platform for selling today. How is Tata AIA Life Insurance approaching online and digital? How are you reworking operations to achieve that strategy?
Although it has seen major growth in recent years, online purchase of life insurance products is yet to become a preferred channel in India. People like to research online but they find tactile contact more comforting before making the final decision. Also, the online channel is for those consumers who want choice, want it quick and want it now. But in India, it is still about human relationships.
The key benefit of the online channel is convenience and we want to offer that by efficient use of technology. Our technology initiatives cover the entire lifecycle of a policyholder – right from onboarding to servicing to claim settlement.
A consumer of Tata AIA Life can now avail life insurance solutions without going through the hassle of submitting physical documents, writing a premium cheque or visiting a medical lab for a health check-up. By integrating the systems with various partners within the ecosystem, like banks, information bureaus and Third Party Administrators (TPAs), we have made the process almost paperless. The consumer profiling, financial and medical underwriting and, risk assessment are now done at the application stage with the help of various native apps.
Your company showed leadership in retail pure protection business with a protection mix of 18.4%, a growth of 165% in absolute retail protection premium over the last fiscal. What led to this growth?
It is our stated vision to be the ‘pre-eminent protection provider’ in the country. With that in mind, we embarked upon a multi-channel distribution strategy wherein our advisors are trained to be more consultants and advisors than agents. They assist consumers in raising the levels of awareness regarding protection products and offering need-based solutions. Our channels viz. Agency, Bancassurance, Broking, Direct Salesforce have helped in reaching out to the different consumer segments.
We created a robust structure to support the sale of protection and rolled out many initiatives that make the process smooth and convenient for our consumers. For example, in order to ensure consumer’s understanding of the policy, we do a video pre-submission call. We conduct a telemedical examination to simplify the medical test process. In case of high sum assured, we ease the process for consumers with the mandatory medical test by facilitating medical examinations online through our network of medical centres. In fact, based on certain criteria, there is a medical test waiver too.
Through our data analytics, we identify gaps in consumer portfolios and their protection needs that have gone unattended. We ensure that we reach out to them with the right protection plan that meets their needs. What makes it a painless process is also that it comes with a pre-approved sum assured.
Recently, we introduced an initiative called 'Rakshakaran Hero' to propel protection awareness and put it in the spotlight. As part of the initiative, we pledge to plant a sapling in the name of the policy-holder for every Term policy we sell. While it is our humble contribution to the planet’s collective future, the initiative also helps us fulfill our objective of ‘giving back to society’, by financially protecting people in a time of great distress.
Life insurance is one of the industries where the benefits in many products are not enjoyed by the customer/policyholder (because the benefit is for the nominee to avail). In such a scenario, what role does customer services play beyond the first sale?
Insurance is a complex and intangible product. Consumers are indeed buying it for the benefit of their loved ones. Insurance companies recognize that it is the worry of their families’ wellbeing and the future of their families that makes consumers opt for life insurance policies.
When consumers buy an insurance policy, they are essentially investing their trust in the insurer. They pay their premiums, with the expectation that in the event of need, the insurance company will honour its commitment. It becomes imperative for the insurer therefore, to understand consumer needs and offer need-based solutions.
Insurance companies now stay in regular contact with the consumer via the online portals, SMS services, Interactive Voice Response Systems (IVRS) and Social Media Chatbots, making premium payments and accessing information has become easy and swift. This assures the consumer that they are on top of relevant information and are in safe hands.
Programs like Dynamic NPS [Net Promoter Score] help companies like Tata AIA, where it is being followed very aggressively, to stay on top of consumer feedback. It helps us modify or course correct if need be. It gives us a live account of consumer experience and helps us stay ahead of the game.
The moment of truth for any insurance company is at the time of settling a claim
It is a delicate and sensitive time and processes have been simplified immensely in order to serve the dependents in times of need. Requirements of paperwork have been simplified. In terms of access, the documents can be submitted electronically. Also, claims are getting settled faster. Today, Tata AIA, for instance, processes over 90% of claims within 3 days.
Companies like Tata AIA are betting big on technology to ensure smoother and quicker service.
I must hasten to add, that while we use a lot of technology to make all of this possible, we do not undermine the role of human interface in the process of delivering the services promised. ‘Consumer Obsession’ is one of our stated ‘Values’. In keeping with that, we recognize and reward our employees demonstrating this behavior, through a program called Amazing Consumer Experience (ACE). The ACE program recognizes employees for exemplary consumer service in the processes of buying, servicing and Claims Settlement.
Can you tell us the key innovations of your company for customer experience both at the onboarding and servicing stages?
Ease of Doing Business is our mantra. Our strategy, our systems and processes are all about consumer obsession. Our advisors are equipped with the latest tools and technology to be able to access information and process requirements.
Some of the on-boarding innovations include login through tablets, video verification, using surrogates to estimate customer income and not asking income documents, using analytics and third-party data for risk scoring. We share the policy document through electronic insurance account, email and will be sending on Whatsapp as well.
As for servicing innovations, we have been one of the first to use chatbots for consumer service as well as offered services via WhatsApp. We have launched an assessment tool for existing unit linked consumers, which helps them get the best value from their existing UL policies by making more informed decisions.
The proof of how technology-enabled and consumer-focussed we are, is in the fact that today, our Self-Service ratio is above 80%, far higher than the industry average.
Your company has the highest individual claim settlement ratio at 99.07% for FY 2018-19 as per the publicly disclosed data. What role do operations play in delivering this number?
We have leveraged the available eco-system by integrating with internal and external risk indicators and strengthen our Risk Management process.
We use technology and data extensively in the risk management process. For example, predictive models and analytical tools are used at the time of onboarding to identify the high-risk policies. In addition, we verify with the industry consortium database and credit risk scores. Additional due diligence is done on the high-risk cases, including cancellation of policies, in case we feel it is not genuine.
As we are now able to detect suspicious cases early in the policy life cycle, the number of such cases at the claim stage has come down significantly. This has ensured that a higher number of claims are paid and, consequently, there are few repudiations. We take stringent action against the people involved in such activities to avoid such behaviors.
We strive to provide differentiated services to our claimants by way of priority treatment at branches, providing help in completing documents and home pick-up of documents.
Now, we are taking steps that would help us do more than just our job. That is why we have introduced the 'Beyond Claims' initiative, wherein we plant a tree in memory of the deceased insured. An employee of Tata AIA Life visits the bereaved family personally to ensure that the claimants are satisfied with our service.