Consumers are banking on life insurers for assurance in times of uncertainty, and we will, therefore, be rolling out solutions and specific product offerings around protection to cater to changing needs during such tough times.
As the Covid-19 related claims have so far been very limited for Max Life Insurance, it does not see any major hits in terms of payouts for settling the claims, says Prashant Tripathy, managing director & CEO. In an interview with Mithun Dasgupta, Tripathy says the proposed joint venture between Max Financial Services and Axis Bank is expected to strengthen the Max Life franchise and bring long-term orientation to its existing and “highly successful relationship” with the bank.
How has the coronavirus pandemic changed the business dynamics for India’s life insurance sector? How has it affected Max Life Insurance’s growth strategies as well as profitability?
Covid-19 lockdown has restricted human interaction to non-physical touch points across the board. As a result, the life insurance sector too which has traditionally been dependent on bank branch walk-ins, agents, and customer meetings, has had to accelerate digitisation of operations to deliver seamless customer services. Companies have responded with quick adoption of ‘digital’ only mediums and we can expect this to be the new normal post the pandemic as consumers equally embrace digital channels.
At Max Life, we are already leading with agility and have transitioned our processes onto digital channels to promptly service our customers. Right from sales to new policy issuance to claims management – operations across the entire value chain have been digitised. Our digital strategy for 2020 is based on three distinct pillars — focusing on customers, sellers, and employees.
The consciousness amongst customers towards protection plans has been rising. How are you accelerating plans to remodel and sharpen your product portfolio to match the current demands? Do you expect premiums for pure protection products to increase further?
We are already finding that the demand for protection business has gone up and is expected to gain further traction post lockdown. People are preferring term products to secure the future of their loved ones in these uncertain times as awareness of protection products is getting a tailwind out of the current situation.
Consumers are banking on life insurers for assurance in times of uncertainty, and we will, therefore, be rolling out solutions and specific product offerings around protection to cater to changing needs during such tough times. While our life insurance policies are more than geared up to address death claims arising out of Covid-19, we are also in the process of defining and addressing the core needs of customers with our new products and policies specific to post Covid-19 era.
Taking into consideration many variables of a pandemic like Covid-19, which is spreading fast in India, have you changed your customer-acquisition model?
At Max Life Insurance, we remain committed to ensure financial protection of the larger community. In line with our commitment to customer centricity, we have digitised all our key operations across sales, policy issuance, claims, servicing, making policy buying and claims settlement possible for customers in a contactless manner. To ensure that new policies can be issued to customers during a time of lockdown and no physical contact, we have also digitised our sales processes to accommodate social distancing.
Since the beginning of lockdown we have effectively digitised our entire sales process, training more than 9,000 frontline sellers and over 25,000 specified persons of banks and agents digitally in just two weeks. In addition to that, we have also installed a TeleMER protocol for policy issuance that is ensuring remote medical underwriting for new customers buying policies during this time.
How many death claims arising due to coronavirus has the company received so far? What kind of hit in terms of pay-out is it looking at for settling the death claims? Do you find any need to shore up the company’s reserves against potential losses from the Covid-19 crisis? Will there be any need for capital infusions from the promoters this fiscal?
So far we have received three Covid claims and all have been honoured. We are not receiving a large number of Covid claims as our customers are largely in the age group of 25 years to 55 years, and mortality is not that high in this segment. Max Life has been very particular on claim settlement overall as this is the ultimate measure of performance.
As the Covid related claims are very limited, we do not see any major hits in terms of payouts for settling the said claims. Also, while we are geared up to combat dynamic challenges related to Covid-19, we do not foresee it affecting the company reserves in any way. We have also created appropriate reserves in anticipation of Covid claims.
When are you expecting to get all the regulatory approvals for the equity transaction deal with Axis Bank? Will it change the current mix of agency and bancassurance channels?
We expect regulatory approvals from Competition Commission of India, Reserve Bank of India and Insurance Regulatory and Development Authority of India to be completed within the current calendar year. The partnership is expected to strengthen the Max Life franchise and bring long-term orientation to its existing, highly successful relationship with Axis Bank. Axis Bank becoming a joint-venture partner in the business will have all round positive impact on Max Life’s business.