Subrahmanyam B, Senior Vice President, Health & Commercial Lines, Bharti AXA General Insurance, brings with him close to two decades of experience in the insurance industry. He joined Bharti AXA General in 2007 and is responsible for building and developing the company’s health insurance portfolio. Prior to joining Bharti AXA GI, Subrahmanyam was with AXA Singapore, for seven years where he was part of the team in charge of developing property and casualty business through broker and direct channel. Subrahmanyam is a Chartered Accountant and an Associate of Chartered Insurance Institute, UK.
Bharti AXA General Insurance is amongst the fastest growing multi-line insurance companies in India. Incorporated in 2007, Bharti AXA General is a joint venture between Bharti Enterprises, a leading Indian business group and AXA, a world leader in financial protection. The joint venture company has a 74% stake from Bharti and 26% stake of the AXA Group. To simplify the experience of buying lifestyle solutions, car insurance, two-wheeler insurance and health insurance for every Indian, Bharti AXA General offers the reliability to buy insurance via Internet for fast and efficient turnaround, without the hassles of extensive paperwork. Headquartered in Bangalore, the organisation has cashless facilities in over 3,500 network hospitals and over 1,900 garages as well as 24x7 claims registration through multi-modal channels like e-mail and SMS.
Replying to Dolly Mirchandani of IIFL about the industry trends and the company future, Subrahmanyam B says, “There is a perception among people that claims settlement procedure is very complex and insurers resort to fine print at the time of settlement to avoid payment of claims. The onus is on insurers to remove this misconception as well as take initiatives to expedite the claims settlement process.”
Give us a brief overview of the non-life insurance industry.
The non-life industry has been growing at a rapid rate in the past few years and India is now one of the top five markets in the Asia. In FY11-12, the total premiums of the industry rose 23% to Rs. 583.44 billion compared to the previous financial year. Over 64% of the total premium is from motor and health segments.
What are some of the challenges being faced by the industry?
The major challenge faced by the industry is how to make profits. With a total of 24 players, competition level is intense and with post-abolition of tariff, premiums have reduced drastically. While a few players in the market are reporting profits including investment income, however a majority of the companies are consistently registering underwriting losses for many years.
Another challenge is to improve the distribution network so that the benefits of insurance can reach the rural areas where penetration is very low.
There is a perception among people that claims settlement procedure is very complex and insurers resort to fine print at the time of settlement to avoid payment of claims. The onus is on insurers to remove this misconception as well as take initiatives to expedite the claims settlement process.
The insufficient number of qualified professionals in the industry is also a challenge faced by the industry. There is a dearth of trained professionals at all levels in the industry. To bridge this gap, insurers need to train professionals that benefit the companies in the long run.
What potential do you see for the industry in general and the company in particular?
The industry is expected to continue posting significant growth in the coming years as India is still an under penetrated market. Health and motor are expected to lead the growth and it is also expected that commercial lines of business such as liability, marine, etc may also grow considerably as Indian companies make their mark on the global scene.
It has just been four years since our operations in the industry, and we have turned out to be one of the fastest growing multi-line general insurers in India. In fact, we crossed the Rs. 5 billion (gross written premium) mark in our second year of operations. Keeping our current growth rate in mind, five years down the line we would be one of the top three general insurers in the country.
To maintain this growth rate for the coming years, our focus will be to capitalise on the opportunities in the health segment. We also aim to create awareness about our healthcare products in tier-II and tier-III cities as the awareness level in these regions is minimal.
How do you ensure that genuine claims do not get rejected?
We have a robust system in place to ensure that all genuine claims are settled expeditiously. Wherever warranted, investigations are conducted to ensure that all the facts of the claim are available to enable us to take an informed decision on settlement. Similarly, insufficiency of claims documentation or delayed intimation of claims is not used as a pretext to reject claims.
As a general rule, we would give the benefit of doubt to genuine claimants even in cases where the claim may not be payable as per a strict interpretation of policy terms and conditions.
The home insurance sector is at a nascent stage, compared to other insurance sectors in India. Do you think home insurance sector has immense growth potential?
Yes, it is right that the home insurance sector is at a nascent stage but, its growth potential is ‘not’ negligible. The possibility of loss or damage due to natural disasters and increased incidents of house burglary have pushed the middle class people to accept the fact that insurance of the home is equally important to avoid great loss.
Moreover, the rise in income level of the middle people has given them an opportunity to buy home insurance policies and thus contributed to the sector’s growth. Also, with increasing awareness of the importance of home insurance, more people will buy such product in future.
How to do plan to expand your reach to the rural market?
The percolation of insurance industry is really minimal in India. Analysing the growth level is also a difficult task and this where the MFIs (micro finance institutions) and self-help groups (SHGs) come into play to spread the business. Our plan is to work with organisations that already have a significant presence in the rural market to distribute our products. We see great potential in the health, personal accident, farmers’ package and tractor insurance segments as far as rural areas are concerned.
Recently, we have devised a new women-centric product called Mahila Kavacha plan. It is primarily designed for the women members of SHGs and also for the women of tier-II, tier-III and rural areas. This product is being marketed through various MFIs and SHGs. For wider distribution of this product, we are planning to tie-up with corporate agencies, more MFIs and SHGs.
How has been your experience with third party administrators (TPAs)? Have they been able to negotiate rates with hospitals?
Our experience with TPAs has generally been good. We work closely with them to not only ensure an enhanced customer experience post-sales and at the time of claims settlement but also in terms of negotiating competitive rates with hospitals.
Do you think introduction of loss corridor from March 2012 is a good step for the industry?
The loss corridor clause has been introduced in 2012-13 by reinsurers bearing in mind the adverse treaty results over the past few years. It will encourage insurers to adopt a more prudent underwriting policy as the loss corridor clause envisages the primary insurer sharing the losses if the claims ratio exceeds a certain specified percentage. In the past, the reinsurer would pick up a much larger percentage of such losses.
What kind of premium has your commercial lines & risk engineering segment provided?
Our commercial lines have yielded a premium of Rs. 880 million in the calendar year 2011. We intend to grow this segment aggressively in the coming years by focusing on marine, liability and construction lines.
What are the trends that you are witnessing in premium and service levels in the health segment?
The past few years have seen significant erosion in premium rates in India as the market becomes competitive and some insurers pick up business for the sake of top line growth. But the industry as a whole has now started taking steps to rationalise the pricing so that it moves to a sustainable level. We see this trend continuing in the coming years.
The general insurance sector is on a steady growth path as mentioned earlier it already has more than 20 players in India and the urban market is a key contributor for the sector. Insurers are adopting the latest technology to provide better service to their customers, while also making them aware of their customised services and products which would prove beneficial to them in the long run.
The health insurance sector is still untapped to a huge extend in India. However, we do see demand from the rural sector, tier-II and tier-III also catching up. Today, people understand the importance of good health for themselves and their family members. Thus, the spread of awareness about the necessities of health insurance has led to the demand of more health insurance products. Also, presence of improved and efficient distribution mediums, rise in agency registration, online sales and recruitment drive by insurers for agents have also aided in increasing the cognisance of the common people on health insurance.
Tell us about your technology initiatives.
We have implemented the e-motor and e-health modules which enable almost instant issuance of policies in these two segments of business. This facility can also be made available to our intermediaries so that they can issue policies at their end. We have also introduced our online selling module where customers can visit our website and purchase motor, health and lifestyle protection insurance covers.
Customer service is our primary focus as in today’s scenario technology plays a pivotal role in running any business. The growing popularity of the Internet among our target audience is immense. Therefore, technology not only helps a company to enhance its efficiency, but also saves time and manpower which in turn cut costs down considerably and proves to be a catalyst for the booming industry.
At Bharti AXA General we use requisite technologies to enhance the efficiency level of our employees, making it possible to offer better services to our customers. Virtual routing and forwarding (VRF) has enabled us to share relevant information with our sister concerns. Moreover, implementation of technology has been smooth owing to the fact that we don’t face restrictions from the IRDA (Insurance Regulatory and Development Authority).
What are the other products in the pipeline?
We are awaiting approval from the regulator for our travel product and would like to introduce it this year. Besides this, we are also looking to file an international health product, a micro insurance product and retirement product with the regulator this year. We are also exploring the possibility of filing a credit protector product with IRDA.
What is road map ahead for Bharti Axa General for FY13?
Our company is one of the fastest growing multiline companies to have achieved the mark of Rs. 7.75 billion (GWP) in just four years of operation. Moving forward, we intend to consolidate our position in the market by diversifying our product mix, improving our service capabilities by investing significantly in IT, explore new distribution channels and tapping on AXA group’s global experience and expertise in terms of introducing new products. Our aim is to be the preferred general insurer in India for customers, business partners and employees.