Edelweiss Tokio Life insurance and Fincare Small Finance Bank (SFB) have announced a bancassurance partnership. The stated aim is to push life insurance to the rural population. Through Fincare's door-to-door banking, the life insurer says it would be able to learn more about the rural customers and design new products.
“We wish to understand this segment of customers, their needs and desires, and then figure out the products suited for them,” said Sumit Rai, managing director (MD) of Edelweiss Tokio Life.
For now, the latter will market its Point-of-Sale (PoS) ‘Saral Navesh’ endowment life insurance plan to Fincare’s customers, beside providing term solutions in the form of individual and group policies. The PoS product offers a sum assured from Rs 50,000 to Rs 1 million, with premium payments from Rs 5,000 to Rs 100,000 (annually) for a policy term of 10-20 years.
The PoS product may be purchased for either a death benefit or maturity benefit. Edelweiss Tokio Life will, over time, offer savings, term protection and group protection insurance products as well to Fincare SFB’s customers. “If we need to create new products from the ground-up in tandem with the bank, we would be happy to as well,” says Rai.
For nearly a decade, Fincare has been offering a credit-life group product in the micro finance segment. The challenge now, says the management, is whether individual life insurance policies could be sold to its customer base. One concern with the bancassurance model is that a life insurer gets access to a large customer base but lack of training for the bank staff leads to mis-selling.
Rajeev Yadav, the MD at Fincare, said, “More than 90 per cent of our products, from on-boarding of customers to sanctioning of loans, are done through digital channels. Processes are simple and employee training becomes simple and easier through digital channels, as the technology intuitively leads the employees through the various elements. There are three simplicities we will focus on -- of product, of process and of understanding, both for people who are selling the product and for customers.”
This, Rai said, combined with an easy-to-use technology service for both on-boarding and sales will help reduce the prospect of mis-selling to rural customers who might be unfamiliar with and hesitant to purchase life insurance.
“Over the next two to three months, we will (experiment) in a limited number of branches to test the technology and processes. Once the technology platform stabilises, we will scale it up across 100 locations over the next nine months,” said Yadav.
PS: Original Article was published at Business Standard. Follow the link for the article.