Continuing with tech for a bit longer, do you use AI and robotics as well for a better customer experience and productivity?

AI and robotics form a core part of our ‘technology-enabled’ approach. We have developed multiple solutions using these cutting-edge technologies and will continue to innovate as newer technology platforms come to the fore. For instance, in December 2018, we launched an AI-based motor break-in inspection service feature. Earlier, a physical survey was the only way to assess a vehicle before renewing the insurance, if the motor insurance policy had lapsed. This led to time delay as the surveyor had to visit the location where the vehicle was stationed, conduct the survey and upload the documents. Our AI-powered solution makes all these processes redundant. It enables the customer to directly upload the photos of the vehicle which are then processed by an AI engine that decides, based on the vehicle condition, to instantly process the policy renewal. Another example is our deployment of chatbots since December 2016. Based on natural language processing, these chatbots not only address customer queries but also enable customers to purchase or renew a policy directly through the chatbot without any human intervention. We are extensively using over 250 bots across our motor, health and other insurance portfolios.

How is the workforce adapting to these technological changes as you focus more on digital transformation?

We run several initiatives to align our talent base to adapt to the latest technologies and harness these platforms to develop innovative solutions. Further, the larger organization is encouraged to align itself and play an active role in this process. We have deployed ‘Micro Enterprises’ comprising inter-functional teams to work on larger opportunities using an agile approach. Further, we run various internal campaigns such as “#DoTheDigital”, ‘#DoTheHack’ and “Idea Manch” wherein our employees participate by suggesting better ways of doing things, many a time using technology. The top idea contributors are recognized at our national recognition platforms. We have witnessed that our employees enthusiastically adapt to the automation processes since it leaves them with more time to cater to complex tasks, imbibe new ways of working and learn on the job. In addition, they actively work towards introducing tech-enabled solutions as value-added offerings for customers. For instance, we have deployed several IoT-enabled devices to provide loss minimization solutions in segments such as marine insurance based on ideas developed by our underwriting team.

Numbers tell an interesting tale about your growth story. Looking at the monthly premium collection figures for May 2019; in 16 years your premium collection grew over 20 times or 20.88% CAGR, from ₹52.7 crore to ₹1095.8 crore. Here, your market share nearly doubled from 4.78% to 9.35% (second highest market share). At the same time, the four public sector insurers saw 4.5 times or 9.79% CAGR growth in premium collection while their market share has shrunk from 78.53% to 42.14%. What factors would you give credit to in terms of growth enablers?

Our approach has always been to build an organisation that understands and effectively addresses the needs of our customers. Having said this, we have focussed on specific areas that we believe are critical when it comes to fulfilling their needs:

· Focus on customer centricity: We have always endeavored to introduce relevant customer propositions that go beyond efficiently settling claims. Our risk management solutions focus on helping customers avoid or minimize the impact of risk hazards so that they can get back to the normal at the earliest.

· Multi-channel distribution network: We have continuously invested in building a diverse distribution network across bancassurance, virtual offices, agents (corporate agents, individual agents and POS) as well as online platforms. This has helped us reach more than 650 districts out of the 725 districts in the country.

· Digital integration and investment in technology: We have been at the forefront in terms of harnessing the latest technology platforms and utilizing them to develop innovative solutions for our customers.

· Prudent risk selection: We take a holistic approach to risk management, which includes a data-driven risk selection framework, optimal reserving and quality reinsurance.

In life insurance, LIC has traditionally enjoyed the sovereign guarantee edge. While general insurance is totally different, how have you seen PSU insurers as competition? The oligopolistic nature of your PSU peers seems to have faded quite fast. Is it because general insurance buyers are more prone to select insurers who have a quicker turnaround time, both in terms of offering cover as well as claims management and the price-sensitive nature of the general insurance business?

It would not be fair to talk about specific competitors. However, in any service-oriented sector or highly competitive market segment, it is the quality of service and innovative offerings that drive customers to choose a brand. Companies that focus on these aspects create a differentiated market position for themselves. At ICICI Lombard, we have consistently focused on being deeply customer-centric in our approach through the entire customer journey cycle, right from policy issuance, claims settlement and renewal. This thrust has enabled us to offer superior experience to our customers. For instance, we have one of the best claim settlement ratios (less than 30 days) in the industry across segments. In the health insurance segment, we settled 99.9% claims within a month in FY2019 compared to 75.3% for the industry. Similarly, in the motor insurance ‘own damage’ segment, we settled 93.1% claims within 30 days in FY2019, compared to 68.4% by the industry. Further, we have continuously introduced value added services as part of our risk management solutions to ensure that we keep adding differentiated and relevant offerings to our diverse portfolio.

Your product mix is skewed towards retail, with 45% share of gross direct premium income (GDPI) from motor-related insurance and 19% share from health & personal insurance. Is that a comforting factor, or you have plans to tweak this? Where do you see the product mix three years from now?

The retail segment within the non-life insurance industry has grown to significant levels over the years, driven by the motor insurance segment that contributes to over 40% of the industry premium. This is an encouraging and important trend, since India’s young and aspiring consumers need to take adequate cover as they strive to fulfill their dreams for themselves and their loved ones. At ICICI Lombard, our product mix has also evolved in line with the industry trend.

Having said this, penetration levels for segments like health and home insurance remain in single digits, offering immense scope for the industry to tap the uninsured. In fact some of these segments, e.g. health insurance have been showcasing robust growth @20% in the last 5 years, compared to 14% in case of motor insurance. We believe that these categories will continue to exhibit significant growth in the future and we will be keen to participate in this journey.

Back in 2017, at the time of your IPO, you had highlighted that share of business from government business was in 20%-plus range. As per latest data, your share of crop insurance is at 17% of GDPI. Is there a strategy to reduce the share going forward given the vagaries involved in the business?

Our focus has always been on selecting the right risk segments keeping in mind the pricing environment. Further, we focus on critical aspects such as appropriate reinsurance terms while taking exposure. As far as the crop insurance segment is concerned, it is tender driven and the pricing rates in the recent past do not seem to be sustainable. We believe that sustainable pricing is critical to ensuring best-in-class claim servicing for our customers.

Bhargav Dasgupta

‘AI forms a critical part of our tech-enabled approach’