Mr. Puneet Nanda, Deputy Managing Director, ICICI Prudential Life Insurance, discusses the digital road map for the company in an interview with ETCIO.com
/sɪmˈplɪsɪti/ : noun
(The quality or condition of being plain or uncomplicated in form or design.)
The Renaissance man, Leonardo da Vinci said it best: Simplicity is the ultimate sophistication. Five centuries later, the relevance of his words has not waned. If anything, it has only assumed greater significance in the digital era.
ICICI Prudential’s working credo is anchored in this pithy observation. And it has profound implications on the life insurer’s business model as it tries to limber up for the digital age.
Digital is redefining the contours of the insurance industry. Back in the day, insurance companies thrived on complexity, abstruse value propositions and seemingly endless grunt work of managing paper-based policies. But all that is set to change. Digital will make this antiquated business model stand on its head. It will take the element of complexity out of the insurance equation.
So what should insurance companies do to survive in the new world order dictated by digital? They will have to break out of the shackles of yore or risk being buried alongside it.
Only the ones who deconstruct their business model, redefine their business processes and revise their customer value proposition will be able to insure their survival in the digital era.
At ICICI Prudential Life Insurance, that arduous journey has well and truly begun. And leading the charge in this effort is Puneet Nanda, Deputy Managing Director at ICICI Prudential Life Insurance.
A running start
Woody Allen famously or infamously quipped that: there are worse things in life than death. Have you ever spent an evening with an insurance salesman?
Insurance as an industry is notorious for confounding its customers. The fact that insurance products are complex, intangible, future focussed and steeped in hypothetical situations doesn’t help the customer’s cause.
With little or no knowledge of the products they are buying, the customers most end up underinsured or buy policies that are not a best suited to their needs.
The practical solution: making the purchasing process simple to enable self-service.
At ICICI Prudential Life Insurance, the process began with self-assessment. The company put its business processes up for review to come to a clear understanding of the business complexities, challenges, and opportunities.
It then brainstormed for nifty ideas of leveraging digital technologies to simplify its processes. This simplification, in turn, brings greater transparency, customer convenience, and trust.
Today all technology investments at ICICI Pru Life are customer focussed.
Customer convenience: a competitive must
ICICI Prudential Life Insurance is the largest private sector life insurance company on the basis of total premium. For FY2018 the total premium collected by the company stood at 270.69 billion.
Customer centricity, for ICICI Pru Life, means organizing the business around customers to establish clear lines of communication and connection. This vision provides a direction for its business impetus and the digital infrastructure ICICI Pru Life needs to build around it.
At ICICI Pru Life, the digital strategy tilts towards customer convenience. The insurer took the first steps towards customer convenience by ramping up its website to make it device agnostic thereby empowering customers to use the calculators and conduct a need analysis on their own and purchase products which are best suited to their requirements. This obviates the risk of intermediaries confusing the customer and fobbing off policies that do not serve their best interests.
“Our intuitive website has been designed in a manner that facilities the purchase of both savings and protection products. Based on previous interactions of the user we can customize the subsequent interactions on our website. This makes the purchase journey on our website faster and seamless,” says Puneet Nanda, Deputy Managing Director, ICICI Prudential Life Insurance.
Today customers have become more vocal, empowered and connected, seeking greater engagement with companies. It is therefore pertinent to provide them an immersive customer experience that can sustain their interest. Expectedly, the insurer has adopted a hard-headed pragmatic approach towards marketing.
Nanda emphasizes that business innovations come from understanding the consumer’s unmet needs. Innovation, he underlines, must be consumer-led. And customers demand simple processes, a focus on their specific need and products that meet their needs.
The ability to simplify means to eliminate the unnecessary so that the necessary may speak. Customers demand products and services that are tailored to their individual need. Customer interaction at all level needs to be personalized. “On the marketing front based on previous interactions of the user, we are customizing the subsequent interactions on our website. This makes the purchase journey on our website faster and seamless. We don’t have one homepage but thousands of homepage experiences. We are also innovating to improve our mobile experience. To purchase a life insurance plan a customer spends a considerable amount of time in filling the application form. We have re-created this part as a chat based application for ease and simplicity. There are tips given at every stage to aid the form filling. So customers are buying policies products whose features they understand and match their requirements and life-stage. Matching products to customer requirements ensures that customers continue with the products till the term of the product,” informs Nanda.
Play it simple
Simplicity is about subtracting the obvious and adding the meaningful. In its quest for customer centricity, ICICI Pru Life is leveraging the government-backed technology infrastructure to strengthen the specific components of its service offerings. The proliferation of AADHAR and other similar developments have been put to use to issue a non-medical policy in a few minutes on the basis of customer’s fingerprints and Biometrics. Prior to the use of biometrics, the average time taken to issue a policy for non-medical cases was 48 hours. It has now miraculously reduced to a few minutes.
Customer centricity is not always about big bang innovations. It can also be delivered with the help of nifty new ideas that identify and solve the most fundamental issues. Nanda explains this with an example. “Even today, the most cumbersome process for the customer is KYC. In reality, it was a process of KYD (Know Your Document),” he quips.
“It was painpoint and required a long processing time. So we created the capability of offering KYC online,” he adds.
ICICI Pru Life is the first insurance entity in the world to introduce paperless onboarding for customers. In an industry first initiative, it initiated e-KYC validation for which it has tied up with NSDL and UIDAI to facilitate the validation of customer information on a real-time basis and issue a policy in a matter of minutes. More importantly, this has significantly reduced the policy issuance time.
Digitization has aided in realtime KYC authentication, providing multiple online premium payment options using credit/debit cards, ECS, direct debit, UPI, Bharat QR, eWallets & eNACH. Customers also receive regular reminders to renew their policy via emails, SMS and phone calls. The results of these digital efforts have begun to show. ICICI Pru Life has considerably improved its persistency ratio from 77% in FY2012 to 85.7% in FY2017.
Digitization has aided in providing better service quality, easy information access and effective grievance resolution to policyholders, resulting in a drop in customer grievance. In FY17, the insurer logged in 95 grievances per 10,000 policies as opposed to 214 grievances per 10,000 policies issued in FY12.
“Clutter and confusion are failures of design. Sophistication lies in eliminating the non-essential and rooting out complexity. Digital has helped us simplify and smoothen out the on-boarding process, creating a superior customer experience in the process. We have been constantly digitizing our business processes to facilitate better services and provide customer-centric products to our customers,” he states.
Fresh fields and pastures new
But playing it simple can be dauntingly difficult. It involves taking a hard look at your existing processes, spotting the complexities and tweaking systems to deconstruct complex processes.
At ICICI Pru Life the process started by digging into several business problems and making them the priority targets for improvements. This is in response to the potentially disruptive undercurrent of digital.
Sounds simple enough, but it isn’t. For ICICI Pru Life, simplicity is all about substracting the obvious and adding the meaningful. And this culture has permeated into the insurance agency’s intermediary network.
ICICI Pru Life is committing significant technology investment to develop clarity around complex processes and practices.
Making a clean break from the past, ICICI Pru Life has empowered its distributors/agents with tablets which in addition to making a good impression on the prospective client also makes the entire exercise of engaging with the customer very interactive and efficient.
Today, its number one agent in the country is a woman from Ahmedabad, a simple Gujarati, and Hindi speaking lady, who can explain all the features and propositions of the policies to even the topmost customers, thanks to the digital interface. Interestingly, after she started using the digital platforms, she earned the respect of the topmost customers and was able to close deals faster. That’s an intangible benefit the company has accrued by going down the digital path.
And ICICI Pru Life has made plenty of serendipitous discoveries on the way. Surprisingly, digitization was most welcomed in rural and remote parts of the country which are far away from branches, agents, and other amenities; yet connected. For instance, Jodhpur which is a 200 kilometer-hot desert ride from Jaisalmer, has a lot of the sales representatives. There would be fewer visits, where they could meet fewer customers and the policies logged in were just as few.
After they received tablets the sales representatives established records in the number of policies sold, without lugging documents or filling applications, courtesy the robust telecom network providing broadband services enabling real-time underwriting that helps complete a sale in a few minutes and in non-medical cases the policy could be issued almost immediately.
Not only were customers much happier, the sales representatives were able to cast they’re net wider to serve more customers. As the distance traveled by sales representatives reduced the sales increased. Today they spend more time cultivating customers. With the adoption of the digital platform, the sales of insurances products in tier 2 cities rose steadily.
Digital has brought a new slant to the direction of the company. Sales are concluded with the aid of portable biometric devices. The report card looks fairly impressive. Over 95% of new business is being logged- in online. The sales force automation tool has enhanced productivity by 30 % in FY17. The seeds that were planted have sprouted into offshoots of growth.
Many a mickle make a muckle
Nanda is an ardent tracker of all that transpires in the field of technology. Analytics, Nanda stresses, will be the wellspring of innovation in the insurance industry.
Its range and scale of operation gives ICICI Pru Life access to large swathes of information from its customers, employees, distributors etc. It is leveraging this data to capitalize on future-focused and revenue oriented opportunities.
Using the customer data accumulated over 17 years, the company has built its predictive models enabling it to understand customers and be attuned to their needs which gives them the ability to tailor make products and services accordingly and identify the life cover it can offer without any further documentation or tests.
The insurer is able to unlock deeper insights into customer behavior and draw correct conclusion about their requirements.
ICICI Pru Life is using analytics centrally to create propositions, up-sell campaigns, servicing, etc. Moving forward, analytics supported by AI and ML will be used by sellers or the distributors or the person who is servicing. “Usage of combined data such as social, demographic, variable information is still at a very basic level, but the trend is catching up fast. Some of these trends will get channelized into strategies. Wherein earlier we were segmenting customers on the basis of SEC, demographics etc. and then advance towards creating customer clusters, from here we are moving away from creating products for customer segments to unique customers,” he reveals.
The company is chasing analytics opportunities that have a clear relation with business value. A robust database and strong analytical engine have facilitated better underwriting. “Data analytics enables us to have better underwriting practices and approach existing customers for upselling the right products which will fulfill their financial goals,” notes Nanda.
“We also share data at an industry level which helps in early identification and prevention of potential frauds. We also have tie-ups with credit bureaus which maintain historical records of credit history of consumers,” he adds.
The insurer is using IT to attain real business value in measurable terms. With the help of analytics, it has been able to reduce the premium paid by the customer from Rs.37,240/- in 2004 to Rs.12,085 in 2018 and at the same time increase the benefits offered.
Tech it to the future
Nanda likes to think and plan long ahead. Under his helmsmanship, ICICI Pru Life is managing a large portfolio of innovations that are in various stages of development.
The insurer is chasing technology opportunities that have a clear relation with business value.
Robotic process automation has resulted in a series of efficiency-boosting initiatives. ICICI Pru Life identified several business processes that could benefit from automation. This includes quotation generation, client maintenance, policy issuance, servicing, customer payouts, and renewals.
RPA has aided in executing the customers request in the CRM/Institutions systems wherein the customers can switch funds, top-up premiums, change the portfolio strategy, select any mode for premium payments etc. The automation witnessed significant improvement in TAT in the processing timelines – TAT for new business issuance reduced from 2 days in 2012 to currently 2 hours for non-medical cases.
It also provides a platform for empowering customers to initiate and complete service requests by themselves. “RPA implementation has resulted in a smooth and error-free end to end work flow. It has played a very important role in managing the BPM more effectively and also deploy any process changes with faster turnaround time,” reveals Nanda.
Technology has become the catalyst for process improvement efforts at ICICI Pru Life.
Insurance has always been data heavy. So it is perfectly poised to be significantly impacted by AI and ML. ICICI Pru Life is doing multiple pilots on AI and ML with fintech/ensure tech companies. Some of the use cases are: auto email classification and replies, auto underwriting, auto claims, identifying upsell opportunities, persistency models and analyzing customer call records to increase persistency.
ICICI Prudential Life is doing multiple innovations in the areas of bots for auto servicing, AI, and ML, facial recognition ID checks, RPA and blockchain.
Nanda has the groundwork covered for his company. ICICI Pru Life is now perfectly positioned to capitalize on the digital revolution.