Until even 18 months ago, the proportion of customers that used digital channels to buy insurance from Max Life Insurance Co. Ltd was less than 5%.
“That was around the time we started our digital journey with a serious intent,” recalls Manik Nangia, director of marketing and chief digital officer of Max Life—a joint venture between Max Financial Services Ltd and Mitsui Sumitomo Insurance Co. Ltd. Now the number of users who “come through the digital door” is 20-22%.
Digital initiatives, according to Nangia, should either increase productivity, pare costs or reduce friction in processes. For instance, “three-fourths of our policies are issued within two days.” The error rate is also much lower, as the agents now fill up the details in front of the customers. Digital has also reduced the friction that existed in processes earlier. “For instance, if we have the Permanent Account Number (PAN) of a customer, we may not require their pay slips,” said Nangia.
Moreover, by syncing up calendars for agents on their smartphones and sending reminders to them prior to their meetings with potential clients, Max Life is trying to get the best of both online and offline models. Educational videos are also shared through messaging platforms such as WhatsApp, said Nangia.
“All these processes are automated through pre-set triggers and alerts. The benefit is that while the agent may have gone through the training on a particular plan a few months back, since he didn’t get a chance to actually sell the plan, he would have forgotten all about it,” he explained.
Max Life has also set up “an analytics centre of excellence” that serves the entire value chain of its business, including distribution, customer service, retention, claims and fraud prevention. “Around 35 people work in this centre, out of which 10 are in the analytics team and the rest work on enterprise MIS (management information systems), dashboards, and other things. Then we have a small team of youngsters from (consulting firm) EY who want hands-on experience in analytics. They are all mapped to the tech team for different competencies and skills,” said Nangia.
Consider the benefits. Typically, life insurance firms need to make a lot of sales pitches in order to sell policies. Max Life alone makes 180,000 “fresh representations” each month and has about 250,000 policies coming up for renewal every month. In addition, it receives more than 100,000 customer calls through its call centre.
“We need to figure out who is saying what to whom to make the whole process better,” said Nangia. This involves capturing all those interactions, conversations and transactions and mining all that data for actionable items. “If the customer has used the word NAV (net asset value) three times in the last three weeks, the customer is not happy and wants to surrender the policy,” said Nangia, adding, “It’s an opportunity to sort it (the concern) out and bring him back as a continuing customer.”
He cited the example of a prospective customers visiting the Max Life website and spending some time going through retirement plans to showcase the power of predictive analytics. “We can ask him, through a pop-up, whether he would like to meet an advisor. Then we can geo-tag his PIN (postal index number) code, which is served by, say, four agents. The agent chosen by the prospect can meet him as quickly as (in) two hours,” Nangia said.
When the agent meets the prospective client, the conversation can start from retirement plans, since that is what the client looked up online and for which the agent “already has the context”. Further, if the prospect has also generated a quote online, where he has entered his data of birth and other details, the agent already has all that information as well. This brings in the “seamlessness between the online and the offline experience,” said Nangia, which raises chances of lead conversion.
Nangia acknowledges the role of digital competitors such as PolicyBazaar.com in “doing a good job as aggregators,” but adds that there is ample scope in the market for companies with different business models and customer segments for tapping into the insurance sector.
The younger generation, especially millennials, are agreeing to share a lot of their data online, which is opening up newer possibilities in insurance, according to Nangia. “The more the customer context, the better I can select risk. If the customer uses a fitness band, has updated his health records online, and if they agree to share that data with us—which a lot of millennials agree to do—I know so much more about them,” he added.
For one, data sharing through mobile apps that track health data from wearable devices such as Fitbit is already being considered by some health insurers (bit.ly/2uOuw7G). “If you are health-conscious, then by monitoring your activities, the health insurers may give you a discount next year. In a life insurance product, however, because the tenure is quite long—30 years is not uncommon—we are still trying to figure it out. In the future, maybe we can also offer some discount based on the data shared,” said Nangia.
“Digital can play a role in each and every part of the insurance ecosystem and consumers will increasingly look to buying and even maintaining their policies online,” said Avinash G. Singh, associate vice-president of the investment research and analytics practice at Aranca, a global research and advisory firm.
Singh says, though, that the life insurance segment had lagged slightly behind general insurance companies in embracing digital (This also reflects the global trend, see graph). While hard data is difficult to come by, the number of policies sold online is “definitely much lower than in case of general insurance,” according to Singh.
“It will take about five-10 years for the life insurance segment to see a good chunk of the policies, especially in the semi-affluent and below households, to be significantly impacted by digital,” he added.
The challenge before firms in moving away from an agent-based model to a digital one is that they need to ensure that “transparency and clarity of information aspects are highlighted and communicated” properly through the digital means to make a difference. In the long term, Singh believes that the agents and the middlemen might “just go away”.
Meanwhile, the next digital milestone for Nangia is to implement technologies such as chatbots, which allow customer queries to be answered in a conversational manner through looking up information pre-fed into a software tool. “While there are basic chatbots that will just pick and present answers from a repository of frequently asked questions and answers, the bots that use Artificial Intelligence (AI) will, in addition to answering the usual queries, might say, ‘Mr Sharma, you are coming to our site after seven months. You used to smoke earlier—have you quit? By the way, if you did quit, we will give you a discount on our term product’,” said Nangia.
Max Life has also been trying to shorten the proposal forms so that they are easy to fill on mobile screens. However, the company got “stuck in one place or the other”, as certain data fields could not be done away with—for compliance or other mandatory purposes. “So we are doing a PoC (proof of concept) for speech technology, using Google Now.” The idea is that the agent will be able to ask the customer questions and the questions as well as the answers will be automatically captured in relevant fields. “At the end of this conversation, a PDF will be generated with a provision for corrections. If the captured data is fine, they just need to press OK,” said Nangia.