Agenda 2024: Fast & Frictionless
Casparus Kromhout, MD & CEO of Shriram Life Insurance Company & Anil Kumar Aggarwal, MD & CEO of Shriram General Insurance talk about their plans for 2024:
Ravi Lalwani: What are the top three challenges your organization has faced during 2023?
Casparus: The life insurance industry has witnessed some ups and downs in the current year, with a few months being lackluster in the current year for the industry as a whole. However, Shriram Life Insurance has been able to overcome this challenge and has grown at a pace of 30% on Individual New Business APE and 72% on Total New Business for the financial year up to 30th November 2023 compared to the same period last year.
Insurance penetration continues to be on the lower side with life insurance penetration being at 3.2%. Though insurance awareness has increased in the past few years, gaps persist especially in the reach of insurance to the remote pockets of the country. However, IRDAI’s progressive stance provides the necessary impetus to bridge the gap. Shriram Life Insurance has been focused on expanding its reach to the customers within its customer segment focused on rural zones and the more vulnerable segments of society.
In addition, insurers also need to be alert and abreast with the latest technology developments and advancements to not be surprised or ‘ disrupted’ by new technologies. The industry has moved fast in the adoption of technology over the last few years and the scope for further advancements is huge.
The i ndustry needs to be better equipped to handle the challenges brought forth by climate change which can considerably impact the insurance industry across both the life and non-life segments.
Anil Anil Kumar Aggarwal: In navigating the dynamic landscape of the insurance industry throughout 2023, our organization, SGI, encountered three prominent challenges that demanded strategic agility and proactive measures:
a) Change in regulatory
environment: The year 2023 witnessed a transformative shift in the regulatory paradigm within the insurance sector, placing a heightened emphasis on selfregulation. Adapting to this evolving regulatory environment necessitated a concerted effort to continually upgrade our systems and processes. At SGI, we embraced this challenge by staying ahead of the curve, ensuring our operations aligned seamlessly with the demands of self-regulation. This proactive approach underscores our commitment to not only meeting but exceeding regulatory expectations.
b) Digitalization: The rapid pace of digitalization in India emerged as a significant challenge in 2023, compelling SGI to redefine its operational frameworks, particularly i n the underwriting of risks. The integration of AI became imperative, reflecting our commitment to leveraging technological advancements to enhance efficiency. While progress has been made, we recognize that further strides are required, especially in the utilization of cutting-edge technology for the distribution of insurance products. Our dedication to innovation remains unwavering, anticipating the evolving needs of our tech-savvy clientele.
c) Diversification: As a predominantly motor-focused insurer, diversifying our portfolio emerged as a strategic imperative in 2023. Over 92% of our premiums traditionally originated from the motor segment, prompting a deliberate shift towards underwriting non-motor products such as Fire, Personal Accident, and Health insurance.
In confronting these challenges head-on, SGI not only overcame hurdles but also emerged stronger and more agile. Our unwavering commitment to excellence and innovation positions us to navigate future challenges with the same fortitude and determination.
What are the top three opportunities your organization sees for 2024?
Casparus: The potential for life insurance in India is high with many underpenetrated pockets. This continues to be a strong opportunity, especially considering the favorable demographics of the country, the rapid adoption of technology, and the better-thanexpected economic growth. Shriram Life Insurance would continue to tap into these segments with a focus on rural and mass market segments. These are also the segments where the need for insurance is the highest. Shriram Life would look towards reaching more customers through diversified distribution models and newer geographies.
Technology will continue to be one of the main drivers, especially in improving reach and service. It is estimated that India has the highest fintech adoption
rate higher than the global average. The previous fiscal count of digital transactions has been quoted at approximately 127 billion, which showcases the huge potential and reach available. This also provides an opportunity to develop and provide solutions that solve for specific needs of the customer through better customer categorisation.
With the rapid change and adoption of technology and the changing dynamics of the market, upskilling would be a key area of focus for 2024. This also provides an opportunity to develop a talented pool for the company to realize its future growth aspirations.
Anil Anil Kumar Aggarwal: As we stride into the fiscal year 2024-25, SGI is poised to capitalize on a myriad of opportunities, meticulously cultivated through strategic initiatives undertaken in the preceding year. The forthcoming fiscal year presents a landscape rich with potential, and we identify three key opportunities that align seamlessly with our vision and aspirations:
1) General economic growth: The robust projection of 7% and above economic growth in the fiscal year 202425 stands as a beacon for the insurance industry at large. SGI recognizes this general economic upswing as a pivotal catalyst for the expansion of the insurance sector. A flourishing economy tends to correlate with increased demand for insurance products across various segments. By positioning ourselves to harness this growth, we anticipate an upsurge in demand for our offerings, strategically aligning our services with the evolving needs of a thriving economy.
2) Increase in insurance penetration: A fundamental opportunity lies in the ongoing surge in insurance penetration. As individuals and businesses become increasingly aware of the critical role insurance plays in mitigating risks, there is a growing inclination towards comprehensive coverage. SGI is wellpositioned to capitalize on this trend, leveraging our robust portfolio of products and a customer-centric approach. By enhancing our outreach and education initiatives, we aim to further elevate the understanding and adoption of insurance, thus contributing to the overall deepening of insurance penetration in the market.
3) Government Increased Focus on Insuring Uninsured Vehicles: The government’s heightened focus on bringing a substantial pool of uninsured vehicles under coverage presents a significant opportunity for SGI. Recognizing the social and economic importance of securing vehicles, the government’s proactive stance aligns with our commitment to promoting responsible and comprehensive insurance practices. Through targeted initiatives and collaborative efforts, SGI aims to play a pivotal role in supporting the government’s vision of ensuring widespread coverage for vehicles, thereby contributing to enhanced road safety and financial security.
As we embark on the opportunities that lie ahead, SGI stands ready to leverage its expertise, innovation, and customer-centric approach to not only capitalize on these prospects but also contribute meaningfully to the growth and resilience of the broader non-life insurance industry in India.
Which f i ve technologies will your organization be focusing on in 2024?
Casparus: SLIC has been focusing on technology to reach and effectively serve its core customer segment - the rural and mass market segment. Though, technology plays a very crucial role in reaching and serving these customer segments; it needs to be used effectively and intelligently in a way that it solves the inherent challenges that these customers face. With this objective, SLIC has worked towards ease of business and service for its customer base - like a sales application for quick on-boarding of customers and paperless proposal logins. We have also enabled eKYC along with the facial recognition feature to enable paperless KYC and further processing. In the current calendar year, SLIC launched the one-of-a-kind Smart Suraksha Card - a smart card with a QR code to retrieve policy bonds, and make renewal payments and has the potential to include customer servicing options as well. SLIC will continue its efforts to develop similar and impactful innovative technology solutions in the coming year.
Further, the focus would continue to improve underwriting and operational efficiencies. SLIC started its data analytics journey in 2017 to help improve underwriting and persistence. We will look towards enhancing and strengthening these capabilities further. Improving operational efficiencies with a focus on being future-ready will be a key part of our tech strategy.
Anil Anil Kumar Aggarwal: In the dynamic and rapidly evolving digital landscape of India, SGI remains committed to staying at the forefront of technological advancements. The strategic focus on technology in the upcoming year revolves around harnessing innovation to enhance efficiency, customer experience, and operational excellence. Our concentration on five key technologies underscores our dedication to leveraging cutting-edge solutions across various facets of our operations:
a) Automation of underwriting for retail products: SGI recognizes the transformative power of automation in underwriting processes. In 2024, our focus extends to the seamless integration of technology to enhance the efficiency and accuracy of underwriting for retail products. By leveraging advanced
Anil Kumar Aggarwal advocates for automation of the retail product underwriting process to improve customer satisfaction
algorithms and artificial intelligence, we aim to streamline and expedite the underwriting process, ensuring precision and responsiveness in our offerings to meet the evolving needs of our customers.
b) Quick Settlement of Claims: SGI is directing its efforts toward implementing technologies that facilitate swift and transparent claim settlements. Through the integration of innovative solutions, we aspire to reduce turnaround times, enhance customer satisfaction, and uphold our commitment to providing timely financial support during challenging circumstances.
c) Identifying and minimizing insurance frauds: The menace of insurance fraud demands a proactive and technologically driven response. In 2024, SGI will intensify its focus on deploying advanced technologies, such as artificial intelligence and machine learning, to identify and minimize instances of insurance fraud. By l everaging data analytics and pattern recognition, we aim to fortify our fraud detection mechanisms, ensuring the integrity of our operations and the protection of our policyholders.
d) Early settlement of commission pay-outs: Recognizing the paramount importance of seamless business operations, SGI is directing focused attention toward the early settlement of commission pay-outs through innovative technological interventions. As part of this strategy, we are in the process of introducing a dedicated agency force team tasked with facilitating fortnight commission pay-outs. By deploying efficient and automated systems in collaboration with this specialized team, we aim to streamline the commission payout process further. This initiative not only enhances operational efficiency but also fosters stronger relationships with our distribution partners. The creation of this agency force team serves as a mechanism to expedite commission payouts, fostering a culture of encouragement and empowerment among our valued agents. This approach is integral to our commitment to creating a mutually beneficial ecosystem that recognizes and rewards the dedication and hard work of our distribution network.
e) Business operations and MIS: The backbone of our organizational efficiency lies in the optimization of business operations and Management Information Systems (MIS). In 2024, SGI is committed to leveraging technology to enhance these critical functions. From workflow automation to advanced analytics, we seek to elevate our business operations and MIS capabilities, empowering decision-makers with real-time i nsights for strategic planning and informed decision-making.
What are your plans for 2024?
Casparus: The company has been focused on reaching more customers within its customer segment and expanding to more geographies. We would look to continue to work with the same growth momentum developed in 2023 by focusing on the more vulnerable segments where financial protection is critical as the loss of a breadwinner can lead to financial catastrophe. The company has grown by 30% on its key focus segment for retail individual business and has been successful in reaching more customers with a 25% increase in new business policies up to Nov’23 in the current fiscal. Shriram Life Insurance will continue to serve this segment of society with a focus on developing innovative and customizable solutions that are available at a click of a button.
Anil Anil Kumar Aggarwal: As we embark on the journey into 2024, our strategic roadmap is intricately designed to align with emerging opportunities. Anchored in our dedication to technological advancement, our multifaceted approach encompasses several key facets. First, we aim to capitalize on the projected 7%+ economic growth by tailoring innovative insurance products that resonate with the evolving needs of a burgeoning economy. Simultaneously, our commitment to expanding insurance penetration drives comprehensive outreach and education programs, contributing to the ongoing surge in understanding and adoption of insurance. Additionally, we strategically respond to the government’s heightened
focus on ensuring a large pool of uninsured vehicles, actively participating in initiatives to ensure widespread coverage. This reflects our unwavering commitment to dynamic growth and responsible, customer-centric practices.
In tandem with our growth plans, we acknowledge the paramount importance of fortifying our security measures, especially in the rapidly evolving digital environment. From the IT department’s perspective, we are committed to adopting additional security measures to safeguard our operations and customer data. As technology continues to play a pivotal role in our operations, we recognize the need for a proactive and robust cybersecurity framework. The IT department is actively exploring and implementing advanced security protocols, threat detection mechanisms, and data encryption measures to ensure the highest level of protection against evolving cyber threats.
Our dual commitment to growth and security underscores SGI’s dedication to not only capitalizing on opportunities but also ensuring the resilience and integrity of our operations in an increasingly digitized landscape.