Customer insights

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Customer insights Product innovation

• Puneet Nanda
• July 24, 2009

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Agenda
Innovations in Life Insurance
Customer insights
Way forward
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Agenda
Innovations in Life Insurance
Customer insights
Way forward
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Innovation in Insurance
Understanding evolving customer needs
Right capabilities to leverage the insight
Product innovation to tap newer segments
Better customer experience
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Product innovation
Expanded product offerings
Unit Linked Insurance Plans (ULIPS)
Health
Focused on multiple need segments
Customized plans for customer segments
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ULIPs Helped customer with

• Disclosure of all charges
• Disclosure of NAV to reflect asset appreciation

Better transparency
Choice of asset allocation

• Choice of assets as per risk appetite
• Ability to switch / redirect premium

• Cover continuance option
• Partial withdrawal in case of need

Control over investments
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Transformed investing habits
Incremental Household savings in Equity
(including Retail share in Mutual Fund and
Insurance equity)
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Helping the economy in growth
FY 08
FY 09
Insurance companies
Rs 55,000 cr
Rs 58,000 cr
FIIs
Rs 52,000 cr
Rs (47,345) cr
Mutual Funds
Rs 14,000 cr
Rs 7,000 cr
Investment in infrastructure grew 26 from Rs
91,000 cr in FY 08 to Rs 115,000 cr in FY 09
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Increased product innovation in health
Disease specific covers e.g. Cancer
Critical Illness plans
Long term guaranteed renewals
Reimbursement Cover for Hospitalization
Fixed Benefit Hospitalization
Reimbursement cover
Comprehensive cover (using savings)
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Focused on multiple need segments

• of premium rose to 18 in FY09 from 4 in FY 04
  
• Multiple pension products to cater to both
  accumulation drawdown phase

Pensions

• Greater focus on the need to plan for education
• Protection of childs education in case of
  untimely death of parent

Child
Long-term goal based solutions
Retail Weighted Received Premium based on IRDA
reports
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Customized plans for customer segments

• Lifestage based asset allocation
• Automatic rebalancing of portfolio
• Diverting to lower risk few years before
  retirement / maturity

Passive customers
Savvy active investors

• Switching options
• Choice of fund types
• Automatic transfer options for rupee cost
  averaging

In addition, a variety of guarantee-solutions are
available for the risk averse
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Better customer experience
Enhanced transparency
Using technology to improve service
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Enhanced transparency

• Disclosure of all charges
• Returns based on standard rates
• Fund accumulation at different points of the
  contract tenure

Customised Benefit Illustration

• 15 day period for product return incase customer
  is not satisfied

Freelook option

• Fund-wise details disclosed
• Daily NAV available

Portfolio disclosure
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Using technology to revamp solutions
Alternate channels

• Telesales and online aided sales
• Online premium payment switches
• Tracking of portfolio performance
• Webchat and IVR based solutions

Annuity card

• Convenient access to monthly pension
• Can be used for cash withdrawals at ATM or for
  purchases at merchant outlets

FINO card

• Identification tool using fingerprints
• Storage device for policy information
  transactions

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Agenda
Innovations in Life Insurance
Customer insights
Way forward
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Indian consumer
Very high value consciousness
Rising affluence
Consumers
Tech comfort of masses spreading
Segments asking for differentiated offerings
Time becoming a constraint
Source Adapted from Rama Bijapurkar, We are
like that only
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Rising affluence
From per capita GDP of US 1,000 to US 1,500
consuming population to grow manifold
2000 Per capita GDP US 500
2007 Per capita GDP US 1,000
2015 Per capita GDP US 1,500
Middle and high income population - 260 mn1
Middle and high income population - 350 mn1
Middle and high income population - 600 mn1
35 growth
70 growth
Rising affluence increases the demand for
different services
Estimates based on NCAER data.
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Very high value consciousness
Consumers will not buy products which sold well
in developed countries earlier. Have information
about latest trends
Opt for a higher price product only when there is
a breakthrough in functional performance
Difficult to entice with imagery-oriented brand
benefits as the major reason why to buy
Source Adapted from Rama Bijapurkar, We are
like that only
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Mobile and Internet users
Source TRAI
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Increasing comfort with technology
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Time is tomorrows currency

• Driven by money
• Money poor- money saver

• Driven by lifestyle
• Time poor Time Saversgt Tech access on move /
  convergence across providers

Customers are demanding more convenience
Source Project Futurist (Research Commissioned
by ICICI Bank)
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Segments have different needs
Young Singles
Young Parents
Older Parents
Retired
Health
Retirement planning
Wealth creation
Life Cover
Low
Medium
High
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Agenda
Innovations in Life Insurance
Customer insights
Way forward
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Innovation would continue across dimensions
Customised Protection features eg, No smoker
rates
More savings solutions
Innovation
Steps to improve customer comfort
Better ways to increase reach
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Possible hurdles
Source BCG- Business week Innovation Survey 2007
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Innovations that transformed industries
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"Innovation will be first if not sole competitive
advantage of the new millennium - G. Hamel
In todays world of rapid, often discontinuous
change, incremental innovation is no longer enough
Need for innovations that are equally radical and
discontinuous in other words, innovations that
rewrite the rules
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Thank You