Mr Rajesh Sud, Executive Vice Chairman & MD of Max Life Insurance Company, is among the rare breed of CEOs to have survived in the top management space for over 17 years in one of India's leading life insurance companies. He has seen the development of the life industry from close quarters since its liberalisation in 2000 and gives us his perspective of the industry.
His journey with the life insurance industry started in 2001 and since then, he has witnessed the industry go through three distinct phases – the start-up and high growth phase (2001 to 2009); the change and transformation phase (2010-2015) and the maturity phase (2016 onwards).
“This 17-year journey of the life industry has witnessed a shift from being largely distribution centric to increasingly customer centric, from traditional products to a bouquet of products, from only an agency channel architecture to a multi-channel distribution architecture and from sovereign trust to trust built on transparency and governance practices,” said Mr Sud. He sees his journey in the industry so far to be exciting, satisfying and a great learning experience.
Key challenges today
The new generation of customers are optimistic, risk-takers and seek immediate gratification and so Mr Sud feels that distribution or the cost of accessing a customer remains a big challenge.
“It is expensive, front loaded on costs and requires patient nurturing over multiple years to build into a relevant scale and quality,” he said.
He also said that there is a need for building awareness about financial security and the role life insurance can uniquely play in it. “The need is to ‘nudge’ the customer into taking action and reinforcing the customers’ decision over a long period of time,” he said.
Digital to be the game changer
Digital is one of the biggest opportunities for the Indian life insurance industry. How one harnesses digital to deliver product solutions and services is becoming a dominant question in business.
“Digital is not just about online distribution or sales, it also relates to an extensive range of digital technologies to connect and service the customers,” said Mr Sud.
He also believes that artificial intelligence (AI) will have a significant role in the Indian life insurance space. “AI can bring a significant change in the way underwriting has been done so far and today bots have the potential to scan a customer’s social financial profile and also analyse data better than humans and accurately predict each customer’s risk profile,” he said.
Need for greater customer engagement
The life insurance industry in India has a bright future.
“Macroeconomic conditions are now favouring the industry’s growth and financial assets have become a preferred choice with more than 50% people opting for it,” said Mr Sud. He feels that the government’s efforts to bring more people into the formal economy have benefitted the industry.
“However, there are challenges and areas of improvement too and the highly competitive industry with 24 players needs to display greater customer centricity by bringing more transparency in products, engaging with customers through need based sales and introducing faster and more efficient service at all touchpoints,” said Mr Sud.
For this to happen, he feels it is important to customise product solutions and service offerings by improving the understanding of customers which may allow better segmentation and product sustainability.
In conclusion, he said that there was a need for distribution channels to evolve and focus more on building long-term relationships with customers. “Most importantly, adopting digital is not a choice anymore, it’s the new normal,” he said.
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