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PNB MetLife India Insurance has recently forayed into health insurance segment with an unique product that covers 35 critical illnesses for a period of 10 years.
An important feature of ‘MetLife Major Illness Premium Back Cover’ (MMIPBC) is that one could get the premium back if the person doesn’t get ill.
Also the product is benefit based and not indemnity based. That means the person gets the complete amount if diagnosed with the disease and does not take into account only the hospital bills. The amount could be used for hospital bills, travel bills, income loss for that period and other expenses.
Now, this life insurer will use the new health insurance product to spearhead its online channel sales. So far, PNB MetLife had no tangible online presence.
Business Line caught up with Tarun Chugh, Managing Director and Chief Executive Officer, PNB MetLife to understand the strategy to go online and build this sales channel.
Excerpts from an interview:
Why has the company decided to get into online channel for sales?
We need to be where our customers are and we find that the urban audience prefers to engage with companies on a digital platform. Even in a category like insurance, we have seen success where customers are buying simple term plans through company websites. Online channel is a cost-effective medium and allows the customers to research and purchase simple products from the comfort of their home or office.
With increasing internet penetration and young consumers are moving to internet for every decision, hence it is imperative for insurers to leverage the technology and educate the young population about benefits of insurance at early stage of their careers.
Why this health insurance product and why not a term plan or any other ULIP product?
We are planning a complete portfolio of online insurance solutions from term, retirement, etc. These products are in the pipeline and awaiting approvals. We will be sharing details shortly around this. Hence our first launch is MetLife Major Illness Premium Back Cover.
The health insurance pie is very small while the need is significant as the treatments nowadays are very costly. More than the disease it is the cost of treatment that takes its toll on the financial health of the family. To corroborate, according to a survey by NSSO (National Sample Survey Organization), 40 per cent of the people hospitalized have either had to borrow money or sell assets to cover their medical expenses. Hence we are foraying into this category and launching the online version shortly.
In India, the online channel is yet to pick up, especially for health policies. A negligible number of people buy health policies online. So why venture into this channel?
Market dynamics are changing, while the online health insurance sales are nowhere close to term, we see this changing in near future with simple benefit based products from life insurance companies like MetLife Major Illness Premium Back Cover (MMIPBC). With hassle-free application process, we foresee good take-up of this plan.
How do you plan to popularize online channel given that more than half of health insurance buyers do not search online before buying health insurance?
Incidentally, there are studies which show that insurance buyers do research online but purchase offline. To popularize our product and increase awareness for benefit based plans we have taken on to social media with a focused campaign around this. Soon there will be a 360 degree campaign covering above the line, below the line channels to further penetrate the market. As a start, we are passing on the distribution cost in form of a 5% year on year rebate on the annual premium to the customers.
How do you plan to address frequent areas of concern for customers like safety of online financial transactions?
We have tied-up with RBI approved payment platform for online premium collection. With the boom of e-commerce portals, consumers have also evolved and are not hesitant in making online financial transactions.
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