'Covering all towns and most villages is the biggest challenge'

'Covering all towns and most villages is the biggest challenge'

Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance, speaks to Teena Jain Kaushal about how the general insurance industry is shaping up. Excerpts from an interview-

Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance
Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance

Q- Insurers have developed new features such as restore and treatments abroad to make a health insurance policy more attractive. What more innovations can one expect in future?

A- Different consumers have different requirements. For example, for somebody in the north-east, accessibility to Kolkata itself is a huge issue. The cost of transportation is going to be a lot, so this is something that we see from the consumer's perspective. A lot of people look for it, so some of us staying in big cities don't realise that. But just go outside big cities and there are a lot of people who want such facilities where they can be transported to big cities. I think we already have this transportation in upper-end products where people are getting transported by helicopters or getting picked up. But in the middle-range and lower-range products, which cater to the masses, for just maybe 100 kilometres, transportation to reach to a good hospital is missing. That is something which we are working upon because a solution to my customers that gives them good access is more important than anything else.

We also want that our customers should get claims very fast. We came out with cashless service in motor insurance policies way back. Now everybody is doing it. We came out with cashless service for health insurance. I think the customer wants something more. Suppose there's a lady in Gurgaon going to Delhi at 10 in the night. She would want that if the tyre goes flat, somebody comes and changes it. She would not want to step out of the car at that point of time or if the fuel runs out or the battery comes out in the parking lot at night. I think the lady would want that somebody would come and change that. So we came out with 24X7 service. So now the lady customer could ask and call our toll-free number. We'll change the tyre, we'll charge the battery, we will get that fuel for her to reach her place.

Q- After the earthquake in Nepal, insurers claimed that enquiries about home insurance policies increased manifold. Did people actually buy the policy after that?

A- Home insurance is again, I think, one of the most under-penetrated products in India. Less than one per cent people who can afford home insurance have a cover. When the Nepal earthquake happened, we thought let's try and reach out to our customers and to the people at large and see what best can be done. So one method we thought of was let's send SMSs. But we did not send the text messages immediately so that people do not see it that we are trying to be opportunist because, although the intention is good, it should not be misinterpreted. So we sent it about seven to 10 days after. The response was after one lakh SMSs, only 12-15 people responded. So I think when a loss happens, those days the enquiries are very high. When it comes to a disaster, I think the first four to five days people think about it. In seven days it was back to where it was.

Q-How has the industry changed after the implementation of the Insurance Act?

A-The industry is excited. I think the regulators will be coming out with some guidelines on that because a lot of responsibility has come on the regulators now in terms of evolving things which were earlier stuck with the bill. An empowered regulator is good because then we don't have to wait for the changes in Parliament. So when it comes to the industry, to the regulator, that has been a good sign. Now we have to wait and see how the regulators come out with their thoughts and their guidance on how to take it forward.

Q- What are some concerns of the general insurance industry?

A- What I have seen is that people love to blame the government, people love to talk of concerns, that is an easier option. I think for me it is not about any concern or issue with the government. Yes, when the economy grows, the industry grows. We are linked to the industry. The issue is can we reach out to people who are not covered? India has 7,000 towns, and the insurance industry has not even covered all the towns for reach. Can we at least begin with covering every town or most of the villages in the country so that people have access to insurance? That would be the biggest challenge. Second, as an industry, can we look at correcting the price? There is nothing to do with the government or with the regulator.

We want that our customers should get claims very fast

Also, how will the industry sustain itself if there is going to be pure underwriting losses happening? Can we correct the price to at least make underwriting profit? Again, if you look at the concerns for us to correct - not for the government or the regulator to correct - can we make policy wordings simple to a customer so that in one sentence she understands what she is covered for? The customer bought the cover thinking her car is covered, but when claim happens she gets 50 per cent or 60 per cent. Now, who do you blame? So can you make a product where you understand that if you are covering a car and these things go wrong, this is paid and this is not paid? So in two sentences, you finish off and you understand what you are buying. If the claim happens you get what you understand.

Q- There has been talk about inflation-linked products. Is it a feasible option?

A- We had thought about inflation-linked products. We went to the market to check with our distributors, but the response was not good. They say they are fine with the fixed-range product, which can be moved up on the customer's notice. But one belief is that the inflation-linked product is necessary because a lot of time people take a sum insured which is relevant when they take it and after some time the sum insured is no longer relevant. So if these products were linked to inflation, they would play a better role.