The insurer is also taking steps to increase its digital presence in the country to reach out to the mass market.
Private life insurer Shriram Life Insurance, which is a large player in the mass market segment, is looking to deepen its penetration and improve persistency further. In an interview with M Saraswathy of Moneycontrol, Casparus Jacobus Hendrik Kromhout, MD & CEO, Shriram Life Insurance talks about the business strategy and future plans. Edited excerpts:
Since Shriram Life is active on the mass market space, what are the steps that the company is taking to sell products digitally?
Shriram Life is active in the aam aadmi market. The feedback that we got from dipsticks in life insurance company is that customers are requesting that we provide our services on the digital platform as well and half of the business comes from rural areas and this is in line with our strategy to reach more families where loss of the breadwinner will be devastating to the financial health of the family.
We will use technology in line with what our customers are asking to serve them better. We are starting with a number of things, one is direct to customer channel where we will try to reach out to more families in the rural space.
We are launching an education app soon. Further, we will also have a sales app for agents which will be Aadhaar enabled. But we are only limiting it to a few agents and once we have enough comfort, we will roll it out in a big way.
How will the direct-to-customer channel pan out?
The direct-to-business will be a call centre-based business with 20-30 people in a call center. We will use analytics to ensure that customers get covered better. Use simple products to have an adequate sum assured.
The life insurance industry has seen an increase in its average ticket size. Have you seen an increase as well?
Our average ticket size is around Rs 19,000 and it has increased over the last three years. It was around Rs 13,000 for a while. We are passionate about life insurance and are covering customers in the mass market space where not too many players are operating. Overall, we are seeing a steady growth though it is not as high as other insurers who sell to high income customers.
Shriram Life had announced plans for a 48-hour claims settlement? Have you been able to fulfil that?
We have gotten a great response from this programme and we know that in line with our strategy. When a claim is received with documents and we are comfortable that it is a genuine claim, we reach out and pay the claims in 48 hours. We are seeing a good response from our customers.
The insurer is primarily known to be South-based. What are your expansion plans?
We have had a very strong expansion to the North and Eastern India as well. The plan is not to only concentrate on the South but reach out to other areas as well. We have expanded to areas like Uttar Pradesh, Odisha and Jharkhand.
Your persistency rates are lower than your industry peers. What are the steps taken to improve on that front?
Persistency should be seen in the context of the market segment that we are playing in. Most of our customers are actually taking their first life insurance from us and a lot of education needs to go into that. We are going deeper into these areas. We are working on improving our persistency but it cannot be compared to other insurers who are playing in the HNI and higher income segments where customers are more self-driven.We have a we-care programme; for the first year of the policy we focus on reaching on to reaching out to customers three to four times a year to make them aware of what they brought and that it meets their household requirement. It is more or less a quarterly call over and above the welcome call. We have been able to improve our persistency in the last few years. It is low ticket size and also work with people who do not have steady income.