After launching insurance plan iGuarantee on Tuesday, Aegon Religare now has four products available to customers online, executive director K Gopalakrishnan told Vishwanath Nair. He also spoke on customer behaviour in the online space, issues in the agency channel and future growth plans. Excerpts:
Now, you have four products available online. What is the guiding principle behind this? What are your expectations from the iGuarantee product?
There is a segment of insurance buyers who say, let me go do this myself. That is where our product fits in today. The customers can look at the product and decide whether they like or not like it. The key then is how are we able to convey to these consumers, irrespective of their background in terms of financial literacy. Our previous product iTerm had revolutionised the term insurance product sales in the online insurance segment. We see iGuarantee product as an equivalent to that. There are people who look at guranteed returns and insurance, and that is the population which will come for this product. Will we do a R100-crore business? I don?t know. However based on our experience with online term and unit-linked products, we are betting big on this.
What is the contribution of your online business to the total business. How do you think this will improve going ahead?
Currently, about one-fourth of the new business comes from the online segmwent. A large part of it is predominantly term insurance. We will continue to run the company as a multi-distribution organisation because market in India is not homogenous. There is a large segment of customers that would like to sit in front of an agent and understand the product as there is a trust element involved. So, the agency or the third party channel will continue to remain big. What I can certainly see is that the online business will continue to form a significant part of our business, between 25 and 35%.
How do you keep a check on frauds when it comes to online insurance products?
When we first introduced our online term product four years ago, this was the question we were asked. We have sold about 90,000 online term plans and if you look at the data that have come in through the proposal forms of these customers, and compare them with the data from the rest of the business, we find a high degree of self disclosures in the online business. What it tells us is that when a customer is sitting and filling these details and is sure that his proposal will be rejected if he does not disclose all the required details, he tend to give full disclosures. The fraudulent elements are largely non-existent, barring a few cases and these cases will get caught in the claims stage. The quality of our book so far is outstanding in terms of claims experience and also in terms of persistency and customer complaints. In online products, the only customer complaints we get are stray cases where they say that service could have been faster.
For agents in the life insurance business, the remuneration is not what it used to be a few years ago. Do you see the problem of agent attrition affecting your business? How do you curb it?
Agency challenges are very different from what they were a few years ago. A large part of the agency force is part time, which grows to full time only if the agents see success. The key part is not about commissions, but whether I as a company am making their lives simpler. It is important that we hire right kind of agents and invest in them so that they can deliver better. We must help agents grow beyond their natural circle of people who they will sell products to. We need to train agents in getting further referals from existing customers. Once we fix these issues, earning is a consequence. The only catch is that agency growth takes time and when it takes time, the rule of the games should not be changed every six months. Whatever be the reason, whether regulatory or from the company?s end, this affects the trust that the agent has in his employer.
What are your growth plans for the year?
This year our plan is to grow the business by 15-20% over last year. Beyond that we will take it as it comes. In terms of number of branches we already have about 70 branches and we believe that there is a lot of business potential that these can generate. We don?t believe in opening branches for the sake of it.