TR Ramachandran, Chief Executive Officer & Managing Director, Aviva Life Insurance India Ltd holds an MBA degree from Bharathidasan Institute of Management and is an alumnus of the CSEP Management Program from Columbia Business School, New York. He is also on the Board of Aviva Asia Pacific. Ram was with Citibank for the past 19 years where he held different roles in credit cards, assets, commercial and retail banking. In his last role, he was Head of Retail Banking where he was responsible for the entire retail bank, including wealth management, branch banking, investments, insurance, consumer assets and the NRI business.
Aviva Life Insurance is the worldâ€™s sixth largest insurance group, serving over 53 million customers across Europe, North America and Asia Pacific. Aviva's main business activities are long-term savings, fund management and general insurance, with worldwide total sales of Â£47.1 billion and funds under management of Â£402 billion at 31 December 2010.Â We are the largest insurance services provider in the UK and one of the leading providers of life and pensions products in Europe.Â Aviva India is a joint venture between Dabur Group and Aviva Group. Dabur Group is the 74% shareholder while Aviva Group holds 26%. Aviva Group is a UK based insurance company and one of the worldâ€™s oldest insurance Groups, with a history dating back to 1696.Avivaâ€™s products have been designed to provide customers flexibility, transparency and value for money.Â We address all lifecycle needs of a customer â€“ savings, protection, investment and retirement.
Replying to Yash Ved of IIFL, TR Ramachandran says "The insurer is looking to strengthen its online and protection product suite. He stated that its looking to launch an online unit-linked insurance plan soon."
Your broad overview on the Life insurance industry?
I believe this is a very interesting yet challenging time for the Indian life insurance industry. With the government being positive on reforms like 49% FDI in insurance we can expect a sea change in the industry if this comes through. We will see more growth and investment in this sector as there will be more skin in the game for foreign partners.
A major trend that we see evolving is customerâ€™s preference towards traditional and pure term products as they are looking for guarantees due to the market volatility and sluggish economy. Also the online distribution platform has changed the way people view and buy term insurance. It is interesting to note that the â€˜protectionâ€™ element in insurance is gaining traction and people are opting to buy pure term plans to secure their familyâ€™s future.
Going forward, once the guidelines for standardised products kicks in, superior customer service will act as the key differentiator for the players, which will prompt the industry to further improve its services and customer education initiatives based on technology. In the future as well, technology will continue to be a game changer for the industry. The next big platform to watch out in 2013 will also be the mobile platform. A combination of ecommerce and m-commerce can create an unmatched arena of innovation and opportunity.
What are the opportunities and challenges do you see in insurance industry?
The emergence of online platform has opened a sea of opportunities for the life insurance industry. If leveraged strategically, this new distribution channel can be a game changer for the industry going forward.
Life insurance penetration in India stands at 4.4%. This goes to show that there is a huge opportunity in the tier 2 and 3 cities for promoting life insurance. We will be working closely with our micro insurance partners to penetrate these markets and also promote financial inclusion. The new bancassurance guidelines which will allow insurers to tie-up with multiple banks will also help the industry increase product reach in a big way.
Insurance Bill, if passed by the Parliament, will give insurance industry the much needed boost and will also help the industry grow significantly.
In terms of challenges, mis-selling has always been an issue. However with a slew of guidelines issued by the regulator and series of internal checks deployed by the insurers, we are witnessing a significant dip in the mis-selling cases. Some external challenges such as choppy equity markets and regulatory pressures will continue to persist and so will the sluggish macro economic outlook. However, these challenges can be addressed and are no threat to the industry in the long term.
Brief us about the launch of new campaign- "Padding up with Sachin"?
Aviva's brand strategy, based on the father-child relationship, highlights the importance of a father's role as a protector in his child's life, whether financial, physical or emotional. â€˜Padding up with Sachinâ€™ is an innovative campaign using digital as a medium to educate young fathers about the importance of protection and financial planning for children. The campaign features Sachin Tendulkar in a series of webisodes teaching a young boy some of his signature cricketing shots, while emphasizing the importance of staying protected. The next series of webisodes now launched have been developed based on an audience vote through Facebook, where chose which shot they would like Sachin to demonstrate next. The campaign mainly targets parents in the age group of 28-44 years and has been launched only on the digital platform including YouTube, Twitter and Facebook.
We have chosen digital as the medium to reach out to this segment because as per our research, 66% of prospective consumers in this age group research online for insurance products, but buy them offline. Hence, being prominently present on the digital medium is important for brand consideration. Since we also have a robust online business, the launch of â€˜Padding up with Sachinâ€™ will help us to further consolidate our position as market leaders in this segment.
What are your plans for FY14?
In FY14, we will be looking at strengthening our presence on the online platform. Owing to our best in class products and a strong analytics team, we are already among the top 3 players in this space. We will be consolidating our leadership in the space by offering a wide range of online products and launch initiatives to make the shopping experience for Avivaâ€™s customers as smooth as possible. We will also be expanding our reach in Tier II and III cities as these markets are grossly under-insured and we see a big opportunity there. We believe the new proposed norms on Open Architecture, if approved by (Insurance Regulatory and Development Authority) IRDA, will be very instrumental for us in achieving this objective. We are also planning a slew of customer-centric initiatives based on technology which will help us further strengthen our services.
Brief us about your tie-up with CSC Ltd?
Aviva has licenced components of CSCâ€™s Integral insurance administration software suite to help market and serve life insurance customers through multiple channels, including agents, bancassurance partners and the internet. In an increasingly competitive environment, we recognised the need to implement a robust product like Integral to better manage our operations.
Â Over the next year, a CSC team will manage the implementation, migration, customisation, training and testing of the Integral components. The systemâ€™s scalable platform will enhance operational performance, allowing Aviva India to increase productivity, improve service to customers and distributors, and pursue new opportunities quickly. Our tie-up with Integral will pave the way for a faster product roll-out, enhanced customer service and more efficient processes, strengthening our position in the life insurance market.
What are the new launched products in the coming months?
Our focus with regard to our product portfolio will be on strengthening our online and protection product suite. We have already launched two new products in CY13 â€“ Aviva i-Shield which is an online TROP and Aviva Wealth Builder which is a traditional endowment plan, both of which have got good response from customers. We will also be launching an online ULIP soon.
What kind of hiring are you looking at?
Talent management, growth and development are our key priorities from people perspective. We plan to further strengthen our sales force this year.
Your view on FDI in insurance?
FDI in sectors of the economy that need capital infusion is like good cholesterol. At the policy level, we need to encourage FDI. FDI brings to the recipient country not only capital and foreign exchange, but also managerial ability, technical knowledge, administrative organisation, and innovations in products and production techniques. Empirical evidence suggests that with FDI, the economy is better able to provide higher productivity and bigger job pools.
Capital infused into life insurance businesses will generate more savings which can be invested in long-term infrastructure projects in the country and the need for investment into those projects can scarcely be over-emphasised.
The Indian insurance industry has faced challenges in recent times. However, the long-term opportunity is still intact and the sector is poised for tremendous growth. Fresh FDI is required to fuel this and to ensure that customers in India get access to world-class services through technology, which the foreign partners bring into India. As of now the solvency ratio of most players is very high so there is no impact on the products being introduced. The industry continues to innovate and introduces best in class products.
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