We'll harness Bank of Maharashtra tie-up to boost performance: Reliance Nippon Life CEO
The company is a joint venture between Reliance Capital and Japan's Nippon Life Insurance
M Saraswathy
Moneycontrol News
Private player Reliance Nippon Life Insurance, which has seen a rise in renewals as well as premium collections, is looking to launch products through its digital channel in FY19. In an interaction with Moneycontrol, Ashish Vohra, ED & CEO, Reliance Nippon Life Insurance talks about the strategy. Excerpts:
Q: After 2 years of continuous de-growth on individual new business, you returned to growth in FY18. What has been your strategy in this front?
A: We focused on re-building our flagship channel agency and took conscious calls of pruning down inefficient channels in this year. Also, digitisation was at the core of all our strategies, with customer centric tools for building sales efficiency:
We launched an end to end digital issuance tool to enhance sales performance through tracking sales activity, generating real time customer propositions and facilitating instant issuance.
In FY19, we will continue to evolve these tools and build sustainability around it. Digitally enabled models and data will be key drivers for growth going forward, and we will harness our Bank of Maharashtra relationship to accelerate performance.
Q: Value of New Business (VoNB) for the company has seen a jump by 46 percent in FY18 YoY. What has contributed to this movement?
We focused on building a strong customer proposition in the year through promoting protection riders. We also shifted our focus on longer term products which provide higher sum assured to customers and continued our segment focus on guaranteed returns as our target customer profiles prefer investment in less risky portfolios. This resulted in increase in average ticket size, and a sharp rise in margins and VoNB.
Q: There has been an improvement in 13th month persistency from 65 percent to 72 percent in FY18? Is there a similar performance trend on the 25th, 37th, 49th and 61st persistency metrics?
A: We made fundamental changes in FY17 including better customer data capture and management, which resulted in a sharp rise in 13m persistency.
We also enhanced our acquisition and servicing processes with complaints falling and claims settlement ratio (95.2 percent) being amongst the top in the industry. Our performance beyond of 13th month persistency is showing a gradual movement, as we channelize our efforts towards revival of customers.
This year we will continue to drive towards regaining our customer relationships from old book through improvised engagement and specific segment target strategies. Also, with stringent controls built now at sourcing stage our renewal book going forward is expected to have much higher persistency.
Q: The total number of individual agents has seen a big drop in FY18 compared to a year ago. What was the reason?
A: Quality over quantity has been our key agenda, and we built stringent controls on recruiting only preferred profiles during the year. Our strategy paid off and the growth in agency with a lower agent base is reflective of increased productivity at a per-agent level. We are designing unique solutions now to augment the sales performance of agents in FY19.
- Protection business is slowly becoming the top priority for most insurers. What is your strategy on this front?
A: The contribution of protection business is increasing in the industry, especially given the high margins on the product segment. We understand however that the customer segments in India are varied, and there are some segments (affluent) only which understand the need for pure protection. A large part of the population continues to perceive insurance as a savings cum protection offering.
It is our strategy therefore to cater to the needs of all segments and offer a varied suite of products. We also consciously focus on riders and high ticket size, which translate into more protection coverage for our customers. We are soon launching unique protection offerings on digital platform, in addition to a large suite of savings products we already offer through traditional channels.
Q: Is there any plan to list on the stock exchanges?
A: FY18 marked the re-surfacing towards profitability for us, with a more stable business now. Our transformation agenda which disproportionately focused on all areas of the business, aided this achievement. Our assets under management grew by 11 percent, and we had a healthy 6 percent growth in embedded value.
As of now, we will focus on accelerating performance across all vital parameters and currently we have no plans of listing.
Original Source: https://www.moneycontrol.com/news/interview/well-harness-bank-of-maharashtra-tie-up-to-boost-performance-reliance-nippon-life-ceo-2615661.html