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Bajaj Allianz Life Insurance Company (BALIC), a leading private life insurer, has set its sight on expanding its focus on ‘Bharat’, and intends to make deeper inroads into Tier 2 and Tier 3 cities in the coming days, said its Managing Director & CEO, Tarun Chugh.
The strategy to expand its ‘Bharat’ focus will essentially ride on two pillars — enlarge the agency network and the number of bank partnerships, including bringing more Regional Rural Banks (RRB) into its distribution fold. This private life insurer is unlikely to go in for setting up of physical branches for expanding into Tier 2 and Tier 3 cities, said Chugh.
Chugh made it clear that enhanced focussed on Bharat does not mean that top cities are saturated as far as the company is concerned.
“Our first port of call for deeper penetration into Tier 2 and 3 cities will be agency, as our agency force is already present in 400 locations. We will get deeper into Tier 2 and Tier 3 cities. We will get wider and deeper in agency in these cities,” he said.
The increased focus of the company on Tier 2 and Tier 3 cities is aligned with insurance regulator IRDAI’s exhortation to insurance sector to take steps to enhance insurance penetration across the country. Although the annual premium collections of life insurance sector has grown leaps and bounds between 2002 and 2022 from level of $12 billion to about $110 billion now, the insurance penetration is yet to gather momentum in keeping with economic growth.
BALIC, which is ranked fourth in terms of Gross Written Premium and New Business Premium, is now the fastest (upwards of 30 percent) in the private insurance industry in terms of growth in number of new policies. Last three years, the CAGR has been 30 percent.
BALIC has in terms of individual rate of new business (IRNB) recorded 38 percent growth in first nine months of this fiscal at ₹3,222 crore. Private life insurance industry IRNB growth is currently at about 14 percent.
Chugh expressed confidence that BALIC will this fiscal grow its IRNB at double the industry level.
“ We will remain among the top four this fiscal in terms of both GWP and NBP”, he added.
Asked if BALIC will look to raise capital in 2023-24 to fund its business growth, Chugh replied in the negative. “ We are still the highest capitalised company. We have 560% solvency margin. Shareholders have been very kind and there is lot of retained earnings with the company. Capital is not an issue and it is one of our strong points”, Chugh added.
PERSONALISATION JOURNEY
As part of the personalisation journey, which is aimed to boost customer experience, the company intends to frame a Relationship Net Promoter Score (RNPS), which will give an overall idea of what customer is thinking about the company across all touch points.
“As a first step we will integrate our Customer 360 platform with CRM. Then measure the experience quotient and then put an overall value (score) to it. Based on data, we will segment customers into either Happy, neutral or unhappy buckets. If a customer happens to fall into unhappy segment, we can then focus on improving outcomes for him and take him up to either neutral or happy segment”, Chugh said.
He said that the company would also look to leverage on its ‘nudge library’ to improve customer experience. Currently, more than 60 percent of BALIC service is through customer self service.
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