Universal Sompo to focus on health & motor insurance
Crop business grows over 100%:
Universal Sompo General Insurance has registered premium growth of 79.52% with net written business of about `23.1 billion in FY 2017-18. It has also superseded general insurance industry growth rate of 17.71%. Remarkable premium growth has been achieved from both crop and non-crop business. Without considering the crop premium, the company registered a premium growth of 44.60%.
Says Rajiv Kumar, MD & CEO: “Our crop business has soared up to about `12.5 billion in FY2017-18 as against `5.5 billion a year ago, registering over 100% growth. Besides, we made substantial progress in growing motor business through OEM tie-ups and using online channels. Health segment has also registered a robust growth in the last fiscal.”
This premium growth has significantly improved market share of the company in the general insurance industry to 1.53% in 2017-18 as compared to 1.01% in the previous year. The company already has corporate tie-ups with Maruti Suzuki and Honda and is quite keen on increasing these over next one year. It would now be devising unique strategies with its partner banks - Allahabad Bank, Indian Overseas Bank and Karnataka Bank, which together have a geographic reach for covering almost all the districts of the country - to streamline business and tap existing banca potentials.
Rajiv Kumar says for 2018-19, the company is proposing to build on its internal efficiencies in order to facilitate customer efficiencies for all the distribution channels. “We have promoted real time integration with our partner banks and this will be extended to others associates. This initiative is expected to provide a big boost in pushing the co-branded health care products on a large scale in 2018-19. We will be strategizing our agency business and will be conducting several activities to improve overall agency performance in the current FY,” he elaborates.
The company sold 64,846 policies in FY 2017-18 other than crop insurance. It found that in recent times, rural consumer requirements at different points in the purchase cycle are evolving and these consumers are not very keen on taking traditional insurance products. “Taking into consideration this changing rural demand, we have introduced unified package insurance scheme, which covers all assets of the farmer like the crop, dwelling and its contents both against fire and theft and the assets which help him in earning his livelihood,” says Rajiv Kumar, adding the scheme also provides protection to the farmer and/or his legal heir in case of an accidental death or permanent disability. Besides, the company has also introduced several health, travel and motor related products offering these through the common service centers for the benefit of rural people. Such insurance policies are likely to pace up in future considering the evolving demand from rural areas that are now looking for insurance benefits for more of their assets beyond crop and cattle.
The company aims to enroll 2500+ PoS agents in coming days which will help to increase insurance penetration in the rural areas.
Universal Sompo General Insurance has launched several schemes in FY 201718, both educational and promotional, to benefit customers. It holds health camps to educate as well as to create awareness among people. It also makes use of social media as well as the print media to resolve general queries of policyholders. In addition, there are also online campaigns and publicity programs using digital channels.
Also, using social media, the company is conducting publicity activities like pan India outdoor campaign ‘USGI connect’ for corporate branding and promotion, regular social media engagement in Facebook, LinkedIn and Twitter, ‘Be Zinda’ campaign, road safety campaigns, health campaigns etc.
Rajiv Kumar reveals that health camps and other campaigns would be continued in FY 2018-19 as these have gradually helped the company to acquire more business. Also the online distribution channel has helped the company to improve market share. The idea now is to focus on promotional activities for agents to improve market share.
Since inception, the company has nurtured and developed an efficient IT system, grievance management system, claim management system and a centralized policy processing process. It has updated technology in the PoS channel and developed a mobile-based application for PoS agents to solicit new business using
their mobile handset. “With increased digitization in Indian economy, we are leveraging new distribution channels like Common Service Centers and extending our tie-ups with web aggregators to generate more online business,” says Rajeev Kumar.
The company has also extended technological benefits to rural India by integrating with the CSC platform, which is benefitting millions of Indian rural households, who now receive insurance benefits via their nearby center. Association with online payment gateways like Paytm and PayU has been initiated for new and renewal premium collections. It has also developed an online portal for policy issuance and fast underwriting.
SMART CLAIM SYSTEM
One of the key customer service initiatives in the smart claim system, which helps lodge claims for motor (OD & TP). The system will interact with its internal operational system using the web services and will ensure faster claim settlement. It also manages claim calculation and autoappoint a claims surveyor.
The company has applied internally developed monitoring system for banca and assistant banca associates in 201819 to improve productivity and increase transparency.
Elaborates Rajiv Kumar: “We have introduced chatbots for resolution of online customer queries covering all our products. This will help the customers in a significant manner. We have also launched Aarogyam to provide easy access to healthcare services in the form of discounts and special offers to the customers. These services are offered by independent service providers like diagnostic centers, pharmacies and dental clinics.”
The company has developed systems using IT to improve policy issuance and to maintain KYC standards. These include CKYC integration, UIDAI demographic authentication, bulk policy booking system, system for digital issuance, etc. There are other several IT initiatives to improve internal efficiencies like integration with GIC, underwriting for group health policies, HRMS system (for employee management) to drive productivity and efficiency.
Says Rajiv Kumar: “With these technological enhancements, efficiencies as well overall procedural turn-around time have significantly improved because of which we now have one of the best claim settlement ratios for our category. With the help of several new initiatives we expect to keep this momentum in FY 2018-19 as well.”
The company has adopted a pricing strategy based on varied market segments as per requirement. For retail products it has adopted a penetration pricing strategy in which it has kept product prices competitive over other insurance companies to acquire customers for basic insurance products with an expectation to bring continuous improvement in product and service quality in forthcoming years.
“This kind of pricing strategy has helped us to bring cost efficiency and ensured profitability to run the business and has helped to build up brand value. However, we keep a regular eye on the quality of our products and services which are to be serviced to our customers at efficient cost over other insurer,” says Rajiv Kumar.
The overall size of the Indian insurance market is restricted by a general lack of awareness of the benefits of insurance amongst the low-income segments of the population. Even though the recently introduced Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Fasal Bima Yojana have increased the insurance coverage in India, further advancement toward awareness creation is required from the regulator.
Rajiv Kumar feels that in the present scenario, though the regulator has generated supply-side interest in insurance via regulations, significant effort in creating similar demand side interest for insurance products is also needed.
Universal Sompo General Insurance provides a bouquet of products, especially health products, to bank customers. At the same time it retains a strong presence in the rural insurance sector. Says Rajiv Kumar: “Our rural based products like Loan Secure and Saral Suraksha have registered premium growth of 11.7% and 20.4% respectively. The banca channel has maintained lowest loss ratio among all other channels and hence has been a key contributor to boost overall profitability. On an average, banca partners have contributed about 35-45% of total business of USGI in the formative years, which had facilitated the company to maintain a better growth rate in future years. We have developed IT infrastructural base to cater to more than 6000 bank branches at pan India.”
TARGETS, FUTURE PLANS
The company intends to retain the market share of 1.70% of the general insurance industry in FY 2018-19. It will be focusing on modernizing and transforming its internal systems in terms of interaction with counter-parties, customers and regulators. Rajiv Kumar says from a business perspective, considering the growing demand, the company will keep its focus on lucrative segments like individual health as well as motor as it is quite keen to increase its presence pan India via all the channels/mode of business acquisition.
The company proposes to undertake various technological upgrades and introduce new systems to support existing distribution channels. It is keen on recognizing technology trends, evaluating the business opportunities and actively incorporating relevant processes and programs into its business model, for outpacing and outperforming competition. “For improving efficiency and monitoring our existing traditional distribution channels, we are in the process of developing a portal for agency and bancassurance channel so that we can monitor agents and bank associates for their lifecycle across recruitment, training and performance monitoring.”
Rajiv Kumar talks about the plan to enroll 2500+ PoS agents which will help the company to increase insurance penetration in rural areas
Customer outreach activities include health camps, consumer awareness roadshows