NS Vageesh As a former Ranji trophy player, it’s natural for cricket to have a dominant influence on Vighnesh Shahane, CEO and Whole-time Director of IDBI Federal Life Insurance Co. While discussing how one copes with managing people and problems at the workplace, Vighnesh says he thinks about how his best cricket captains would address the issue on the field and he usually gets the solution.

A happy dressing room gets better results from the team, he says, and adding that he acted on this belief through a number of HR initiatives that he reels out — including flexi-time for employees, working out of home twice a month, a dress down culture (smart casuals on all days except if they are meeting clients), moving to a five-day work week, keeping an open door, and remaining accessible.

It’s been a little over 10 years since the company opened for business. Although a late entrant, it has managed to move ahead, breaking even in four years as against the industry norm of seven to nine years. Vighnesh says that entering late had its benefits: “We could learn from the mistakes of others.”

Principal goals

He took over as CEO four years ago and laid out four principal goals — improving profitability, customer-centricity, becoming an employer of choice, and breaking into the top 10 rankings in the industry by 2020. The company was ranked 17 in individual retail premiums at that time. At present, he is a whisker away from achieving his goal with the company’s ranking moving to number 11.

This year there have been headwinds — importantly the high base effect of last year’s demonetisation-induced sales as well as the cloud of uncertainty hanging over parent IDBI’s stake sale plans.

Value discovery

There has been speculation about whether the company is up for sale to another competitor. On how the promoters of IDBI Federal Life will unlock value, Vighnesh confines himself to saying, “The shareholders are in a value-discovery phase at this point in time to unlock the value of this franchise. The route that a lot of top life insurance companies have taken in the last few months is of IPO or public listing to achieve the same objective of monetising the value.”

Keeping staff morale up and retaining existing talent in this environment of uncertainty have been some of his main challenges. The company expects to come close to ₹2,000 crore of gross written premium in the current fiscal (as against ₹1,565 crore last year). Profits could be ₹80-100 crore against the ₹52 crore recorded last year.

Persistency ratio

There has also been a focus on improving the quality of the book by getting the persistency ratio (getting customers to keep paying their premiums) to move up.

Use of analytics and modelling techniques have helped here, Vighnesh says, while adding that persistency ratio is a key metric on which he is measured. He makes it a point to personally make calls to at least two delinquent customers every month.

Another initiative which has paid off is keeping away from low-ticket policies, after noticing that the highest lapses happened in such policies. As a result, the company now sells only policies with a minimum premium of ₹25,000. This did initially face pushback from the field force, but Vighnesh persuaded them with data and the results have borne him out. Persistency in the 13th month today stands at about 80 per cent.

Reining in costs

Asked about sustaining profitability, Vighnesh emphasised on the efforts to keep costs to a minimum and on the culture of frugality (though not stingy, he is quick to add).

As part of that philosophy, the company decided to take the unconventional route and not spend money on advertising. It has instead decided to focus its brand-building efforts around sports activities, fitness, health and well-being.

It has tied up with badminton star P Gopichand to promote the game and has also sponsored marathons in four cities (Delhi, Mumbai, Kolkata and Kochi). These initiatives have delivered good results in terms of visibility and recall, Vighnesh says, adding that market share will follow mind share.

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