Private life insurance company Edelweiss Tokio Life is betting big on its agency channel to drive growth. In an interaction with M Saraswathy of Moneycontrol, Deepak Mittal, MD & CEO, Edelweiss Tokio Life talks about achieving profitability and new product areas. Excerpts:-
Did demonetisation have any impact on the business?
Things are back to normal. The industry did see some impact in November but by the end of December, the situation was back as usual. What we noticed was that banks as a distribution channel had good growth during this period of demonetisation. While we do not have a bank promoter, our bancassurance partner Catholic Syrian Bank has performed well.
Are you looking to increase the number of bank tie-ups?
For us, the agency channel has been the main area of focus for us. It is good to have a core distribution platform. Due to the emphasis on need-based selling and appropriate training, the number of active agents have also gone up. Now that agency has seen stability, we are in a position to look at other channels like bancassurance and direct business.
Bancassurance will be a huge advantage in an open architecture model. There is also an implied trust in the bank. We will be very selective but will put in our best efforts.
When do you aim to become profitable?
We are still in our growth phase. Currently, this is an investment period for three to four years. After that, we will reach break-even. The additional capital that came in from the foreign partner after they increased their stake to 49 percent has gone into expanding our footprint in the country. Overall, the brand is also beginning to get acceptance among the public.
When you talk about direct buying, will it still be an assisted model of insurance purchase?
Sales which are infrequent tend to be assisted. Given the nature of the product, there is some amount of advice in the product. That said, new age-technology like artificial intelligence and chat-bots are also coming in.
What are the new segments that you are looking to enter?
We will have to open new market segments for growth. Goal-based planning has led to higher ticket sizes. Further, we do see a good growth from rural areas. Almost 17-20 percent of our policies are from rural areas.
Going forward, we would also like to participate in the government’s term insurance scheme under the Jan Suraksha Yojana. Presently, we are in discussions with our partner banks with respect to the Pradhan Mantri Jeevan Jyoti Bima Yojana.
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