The highs and lows in Aegon Life's reinvention

In an industry which is dominated by individual insurance agents, taking a digital-only approach could have been challenging. Aegon Life Insurance did just that in 2018 much before the pandemic gripped the world. The insurer was already on a path to revamp its tech stack from scratch at a time when digital sales had hardly made inroads in the insurance industry. It is now unraveling its tech-enabled journey from the next quarter, adding more digital partners, amassing more business.

Short-term pain

The company reported a 20% jump in its total assets at ₹3,308.75 crore in FY21 compared to ₹2,748.77 crore in FY20, making it to the 2022 list of Fortune Next 500. Net income stood at ₹940 crore, a jump of 72% in FY21 from FY20.

Shutting all offline distribution has hit Aegon Life hard, with the company running much behind its peers due to the transition. The data available with Life Insurance Council shows the insurer recorded the least first-year premium consistently between FY20 and FY22. It has been reducing in absolute value as well even as the industry share has grown. The private insurers collected ₹88,237.6 crore in first-year premium in first 10 months of FY22 compared to ₹64,448.2 crore during the same period in FY20. For Aegon, it was just ₹16 crore during 10 months in FY22 compared to ₹55.8 crore in FY21 and ₹75.1 crore in FY20 during the same period.

“At Aegon Life we closed all offline distribution channels in 2020 when we rebooted our business. Our focus was on getting the right system in place and our numbers went down because we were not promoting any new business during this time. Now we are aggressively reaching out to digital partners and corporate agents,” says Satishwar Balakrishnan, Managing Director and CEO, Aegon Life Insurance.

Digital Native

Aegon Life is taking the digital-only approach. “Our new tech stack puts us on par with any other new-age tech company and ahead of most industry players. We have an API-driven cloud native model and service-orientated architecture,” says Satishwar.

The company has decided it will only do digital distribution. Even in case of banking distribution, it will cater to clients with net banking.

“New-age customers do not like people calling them to push sales. At Aegon Life, we want to contextualise our message and make it a pull product. When customers realise the need and want to understand more, then on-demand assistance will be available to close the sale,” he says.

The company is taking efforts at simplifying the language of its policies so that policyholders can easily understand the product and process. Its underwriting process will also be data driven and leverage facial analytics and behavioural science. This will drastically reduce the time taken for underwriting decisions. It means zero paperwork for the customer, and hassle-free onboarding.

Innovation — building context

Aegon is tying up with different digital platforms to enhance its digital distribution. PhonePe, Paytm, Mobikwik and Flipkart are some of its existing partners. The data will play a huge role in insurance distribution. For example, if a new-age parent is buying diapers then the e-commerce website will showcase why having a term plan or a savings plan is needed for your child’s education. Similarly, other such contextual sales will be pitched.

“Our partners will not restrict them to their own product. We all are part of the ecosystem. They will pitch contextualised services from different partners, that is, a full bouquet of products or services from savings to banking and insurance together. The relevancy factor is important,” says Satishwar.

Aegon Life plans to onboard 100 such partners in 2022, and is aiming for ₹300 crore in new business premium in 2023.

In product innovation, the company will be launching a savings product that will give much more liquidity than existing products in the market.

'Kam Insurance Lene ki Bimari', the ad campaign by Aegon Life had popularised the term plans in 2008 when savings-linked insurance was the norm. The catchy ad featuring late actor Irrfan Khan as its brand ambassador connected with the people. Fast forward to this day, the company is all set to unleash its new avatar — a fully digital insurer.

“Aegon Life is an entirely new organisation now. We have established our tech and data foundation and we are now ready to scale new heights,” says Satishwar.