In a freewheeling chat with Aniruddha Bose (Editorial Consultant, BW Businessworld), Deepak Mittal, MD & CEO, Edelweiss Tokio Life Insurance (ETLI) discussed his company's competitive strategy, his views on the newly launched IMF structure, the future of Life Insurance distribution in India, and the USP's of their newly launched product TotalSecure+
Please tell us a little bit about Edelweiss Tokio Life Insurance's (ETLI) plans to compete with other, more established players over the next 5 yrs.
Right from the beginning, we have believed in needs-based selling to provide solutions to customers. This is demonstrated in our tagline "insurance se badhkar hai aapki zaroorat". We have been able to do this through superior products and service propostion for our customers. We will continue to use this approach going forward and provide customer centric solutions for our customers.
With our superior fund performance, all our funds are currently rated 5-star by Morningstar, we believe we will be able to do this effectively. We continue to focus on front-line productivity and believe that technology will play a key role in driving productivity and efficiency in the organization.
In the past three years, we've seen a steady exodus of Life Insurance Agents across the country. Do you see this trend continuing, and do you see a large paradigm shift in the offing?
I am not sure if "exodus of Life Insurance Agents" or "rationalization of Life Insurance Agency community" - which means only the committed and capable would continue - is the right terminology.
Nevertheless, there is an apparent trend where the number of licensed agents in the industry has come down from March 2010 (29,78,283) as on 31st March 2010, to 20,16,557 as at end of March 2016 (source Life Council published data). As we speak, this number is 19,87,918 as on 31st July 2016, during the current Financial Year.
Is your distribution strategy more digitally-oriented or do you still feel there's potential in the channel-based strategies and feet-on-street distribution models?
While we continue to focus on digital channels, either through the online channel or through digitally-enabled sales, currently the share of pie of online channels is quite small for the industry and for the foreseeable future, feet-on-street models will continue to dominate the industry.
We are one of the only new companies with a presence across all channels. These are exciting times for distribution as regulations are creating interesting opportunities ilke open architecture in bancassurance, IMF, e-Commerce guidelines, etc.
We believe that digital channels will play a key part in the future, and we continue to watch this space to capitalize on whatever opportunities present themselves.
How do you view the future of the recently launched IMF (Insurance Marketing Firm) structure launched by the IRDAI? Do you see it as a passing fad or a game changer? What challenges exist in its implementation, and is it going to form a key part of ETLI's strategy?
I think it is a very good concept and it is just a matter of time when committed insurance professionals would discover the full potential of the opportunity. The regulation became effective on 21st Jan 2015 and till now only 34 IMFs have registered (Metro - 21, Cat-1 cities - 5 and Others - 8). Nevertheless, one feels that it is a period of gestation and should catch up very soon.
You've recently launched a new product, TotalSecure+. What key features differentiate this product from its closest competitors? Don't all products have the option of strapping on critical illness riders?
The product offers multiple choices to the customer so as to design a solution basis his/her needs, while offering comprehensive protection. Unlike a CI rider, this product provides Accelerated CI options (which means the policy will continue with the death benefit reduced to the extent of the critical illness sum assured paid) in two variants (7 illnesses and 35 illnesses), depending on the requirements of the customer, which is a cost effective feature and caters to a unique need.
In addition, this product offers complete choices to the customers in terms of designing the benefit and how the benefit would be paid (lump-sum, monthly income or a combination of both). Monthly income can be leveled or increasing (to counter inflation). Also, monthly income can be received in 36 months, 60 months, 120 months or 180 months depending upon the need of the customer. All these benefits are offered at a very competitive price.
What client segment would you say TotalSecure+ is best suited for?
The USP of the product is that there are various features and flexibilities, which can cater to needs of multiple client segments. Continuous policy term, various benefit payout options and multiple premium payment options will ensure that the product has a mass appeal.
That being said, this product has been designed keeping in mind an urban, upwardly mobile, 30-45-year-old consumer. Critical illness benefit will be particularly attractive to them as the modern urban lifestyle and its health consequences demand a critical illness cover. Also, the policy term for this cover extends to 40 years.