‘Our customers today demand that we be digitally native’

Bajaj Allianz Life Insurance expects to continue with its all-round performance, breaking new ground on its digital journey and enhancing the share of its online sales. Excerpts from an e-mail interview:

How was 2017 for Bajaj Allianz Life Insurance (BALIC)?

FY 2017-18 has been good for BALIC. As in Q2 FY 2017-18, we were the fastest-growing company among our top 10 peers in terms of weighted received premium. Our Agency Channel continues to be the dominant channel for individual business and has grown at 40 per cent. We are seeing significant growth in all our other channels. For the first time, our assets under management crossed ₹50,000 cr. We have covered more than 2.1 crore lives as on November, the highest among private life insurers. The overall outlook is positive, and we are confident of growing further.

What are your expectations

for 2018?

The outlook for 2018 for the life insurance industry is quite positive. According to the RBI Statistics Handbook 2015-16 on India’s household financial savings, life insurance is the second most preferred investment option at 19 per cent (after bank deposits, which account for 43 per cent of the savings income). Also, in the wake of demonetisation, there is an increased interest among people for investing in financial assets rather than physical assets. Further, an upswing in the stock markets has improved market sentiment and contributed to the growth of investments in unit-linked insurance plans (ULIPs).

The industry is expected to see a shift in terms of the products offered and their value additions for customers. Today, the customer wants simplified and customer-friendly products to suit his financial goals. To enhance the customer journey and convenience, technology will play a crucial role and be a big game-changer. In 2018, we will also see a significant increase in sale of policies from online channels.

Will Bajaj Allianz Life look to list this year?

Currently, we are not looking at listing.

How have the company’s digital strategies played out?

At Bajaj Allianz Life, we are continuously investing in improving our offerings on the digital platforms, both through our own website and via web aggregators. The contribution of online sales to our entire portfolio has been increasing year on year.

As a company, we are working to make our processes end-to-end digital and paperless. Our customers today are used to interacting with companies that are digitally native and expect similar service from all companies. We are working to be in tune with the expectations of the end-consumer. A customer today can have his proposal form digitally filled on a tab, complete his E-KYC via Aadhar verification and have his policy document delivered electronically via e-mail and stored in IRDAI-authorised e-repositories.

We launched our new chatbot ‘Boing’ and revamped customer portal Life Assist. Services like fund statements, fund switching, Aadhar updation, and so on can be availed of. The response from customers for both the initiatives has been highly encouraging. About 70,000 unique customers have used our online customer portal and 60,000 unique customers have availed of the services of our chatbot.

How fast has your digital channel grown?

As a company, we are witnessing triple-digit growth in the online space both in-house and via aggregators.

Recently, IRDAI allowed private equity and venture capital funds to pick over 10 per cent stake in a life insurer. Will Bajaj Allianz Life look to rope in such investors?

It is a positive move from the regulator, but we are currently not looking at investments from private equity and venture capital funds.

How do you see the competition in the current business environment?

We operate in a highly competitive environment with 22 private players (excluding Sahara) and LIC. Each player is creating its own space.

However, considering the low insurance penetration rates compared to the global average, the skew towards investments in financial instruments in the recent past, and given that India is a growing economy, there is significant opportunity for all players in the sector.

Where do you see your growth coming in the next fiscal?

I see growth coming from the ULIPs space with the uptick in equity markets. At BALIC, we have seen a 67 per cent growth in ULIPs sales this fiscal.

Additionally, I expect significant growth in the financial inclusion and micro-insurance space with the help of our diverse institutional partnerships.

What are the growth aspirations of the company

for 2018-19?

We want to continue to be among the fastest-growing companies in the industry. Going forward, we want to develop and grow our proprietary channels both in the online and offline space, and we expect the quality of business to improve further with our customer-friendly products and value-added services.

What more can the regulator do to improve life insurance penetration in the country?

Changes in FDI, IPO guidelines and now PE and VC firms being allowed to invest have made the sector very attractive for investors, thereby giving insurers more freedom to invest in building capabilities. The POS guidelines, which came recently, will significantly help improve the distribution of insurance products. The move towards initiatives like C-KYC across investment products will make the onboarding of new insurance customers easy and help improve insurance penetration.

The regulator has also formed a committee to review life insurance product guidelines and we wait to hear from them. We have to work with the regulator to make the sector ‘future-ready’.

Please tell us about the company’s business mix.

How do you see it moving in the short term and in the medium term?

We have a diversified product portfolio with a decent mix of unit-linked and traditional plans to cater to all age and income groups on the basis of risk appetite. However, the percentage of ULIPs is high in metros, while in the hinterland, it’s largely traditional.

What are your expectations from the upcoming Union Budget?

Primarily, the disparity in taxation for pension plans vis-à-vis non-pension products should be reviewed. As of now, only a third of the maturity amount under pension plans is tax-free. The remaining amount needs to be used to purchase annuity plans under IRDAI rules. This annuity corpus is also treated as income and taxed. Considering this, I would like to see both these tax rules for pension plans relaxed as far as possible to give a boost to the entire pensions space and to encourage Indians to plan for a worry-free retirement.

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