Private life insurer Aditya Birla Sun Life Insurance is looking to double the share of protection mix (share of protection plans in total business) from about 7 percent currently to 15 percent in two years. Simultaneously, the insurer is also looking to double the share of millennials in its customer base.
In an interaction with Moneycontrol, Kamlesh Rao, MD & CEO, Aditya Birla Sun Life Insurance said that the company is working to increase the share of the protection mix in their business through a mix of efforts of getting younger people to buy policies, offer array of options to choose from and also expand the digital sales process.
IRDAI data showed that the insurer had seen a 26.3 percent year-on-year growth in its new premiums for the April 1-January 31 (FY21) period to Rs 3,490.80 crore.
“We have launched a hyper-personalized term plan, ABSLI DigiShield Plan, to cater to the unique protection needs of customers. One plan will have multiple variants to cater to the needs of the customers including protection, critical illness and added benefits,” he added.
This plan is among the first such policies in the Indian market that offers the option to reduce the sum assured at a pre-defined retirement age, allowing customers to align their cover as per their outstanding liabilities and the life stage.
So, a customer can reduce the sum insured by 25 percent or 50 percent at the time of retirement. Rao said that this could be helpful since most customers have taken care of their financial responsibilities like loan payment by the age of retirement and also have adequate savings for the future.
Protection plans are term insurance plans which pay the family/nominee if the policyholder dies during the policy tenure.
Getting younger customers
Rao explained that the majority of the business (60-65 percent) comes from the 35-45 years age group. Another 15-20 percent comes from the 45 years plus age group while 15 percent comes from the 28-35 years age group.
“We want to ensure that the product suite is such that even millennials should want to buy the product. We are also ensuring that the digital journey of customers is quicker and this would especially appeal to younger customers. We want to double our millennial-led business in two years,” he added.
Rather than focussing on a traditional sales method, Rao said that the company is not employing data analytics tools to offer products to its customers.
“We also do a pre-approved sum assured for each customer based on data analytics. This method of selling was initially 2-3 percent of our business in April/May 2020. But by January 2021, about 22 percent of the business comes from this programme. It is an efficient way of selling because we are already doing a need-analysis and offering an appropriate product,” he added.
According to him, about six in 10 customers are buying the product recommended through this method. Going forward, he said that the company will also be implementing a project to issue a new policy within 24 hours of submission of documents.
Areas of expansion
On the products, Rao said that Aditya Birla Sun Life is working with sister company Aditya Birla Health to creating about four combo products that will have the benefits of life and health insurance.
He added that customer response for these products will gauged through their sales channel from April 2021. Based on the response after one quarter, the successful products will be filed as a combi product for IRDAI approval.
Combi products are those which have the features of life and health insurance. A customer needs to just buy one product to get benefits of life insurance and medical insurance.