How ABCL's businesses survived the lockdown

Learnings from how Aditya Birla Capital's various verticals performed in lockdown, and why the financial services sector needs to rethink how it works

Updated: Aug 14, 2020 04:03:50 PM UTC
Mr. Ajay Srinivasan is the Chief Executive of Aditya Birla Group's Financial Services.

This is part 2 of a behind-the-scenes look at how the conglomerate navigated the Covid-19 lockdown, and its impact on various verticals. Read Part 1 here

By the time the lockdown was formally announced by the government, most of ABCL’s subsidiaries had shut branches and transitioned to working from home. Here is an account of how the various businesses fared in the lockdown period.

Life Insurance
For ABCL’s life insurance business, March has always been a significant month. While the company’s volumes did get impacted due to the shutdown, it was able to achieve 100 percent first-year premium as last year on a full year basis. Also, within a span of 24 hours post-lockdown,100 percent of the operations teams were connected digitally, and close to 50 percent of branch customer service executives were digitally activated to service customers. Customers were made aware of how they could use the digital payment services to pay their renewal premiums as well as make payments for new policies.

The life insurance business focused on pre-approved digital products and simplified tele-sales journeys to offer products to its existing customers. During April-May 2020, the company did new business premium equivalent to last year, which was much ahead of overall industry trend. What’s more, 100 percent of this business was sourced digitally. ABCL’s Life Insurance business settled 1,041 claims in the last 15 days of March amidst the lockdown.

Health Insurance
ABCL’s health insurance business digitally enabled more than 90 percent of its processes in sales and operations. Also, the business was able to seamlessly operate its claims process near full capacity, without impacting customer experience.

The company's WhatsApp self-service went up by 65 percent in April 2020 vis-a-vis FY20 average, while digital reach increased over four times in April 2020 as compared to FY20 Average. The business recorded digital renewals of 82% in April 2020 vis-à-vis 58 percent in FY20 average.

The gross premium for the health insurance business grew 71 percent year on year.

ABCL’s Asset Management Company (AMC) continued to process subscriptions during lockdown and all of this was done remotely. In March 2020, the Company added more than 50,000 new SIPs; most of this was done digitally. Also, the sales numbers weren’t very far off from its new monthly SIP average.

The business was also able to leverage strategic partnerships such as PhonePe and were able to acquire 15,000 new customers during this time. Subsequently, it accelerated digital adoption and achieved 97 percent digital transactions in April 2020. The AMC business conducted nearly 1 Million digital transactions under lockdown.

ABCL’s lending and housing businesses were most affected during lockdown. These businesses depend on document collection, physical signatures and property registration for regular operations. Since all of these weren’t possible during lockdown, this business wasn’t able to disburse money.

On the positive side, the business-built liquidity buffers by raising Rs 4,500 during lockdown at optimal pricing. Over Rs 3,100 crore of term loans were sanctioned. The lending business raised Rs 400 crore from NCD in April ’20. ABCL’s lending business ensured availability of sufficient liquidity for FY21 even in stress case scenario for its NBFC and HFC businesses.

ABCL’s broking business, being a real time transactional business, smoothly functioned while operating 100 percent from home. ABCL’s subsidiaries increased availability of its services through self-service channels such as portals, apps, a chatbot and WhatsApp. They implemented AI-Voice Bot Calling to reach out to customers. Smooth running of over 200 robotic processes in mid and back-office processes ensured there were no processing backlogs. The businesses attended to more than 90 percent customer service requests on digital platforms in Apr 2020.

ABCL and its subsidiaries were equally active on the people side–both in terms of tracking the health of their employees and the family members of the employees. The businesses ensured putting in place processes to ensure that the employees remained engaged.

The company helped employees utilise the lockdown time to learn new skills. The learning teams consistently used digital platforms to push out new content. As a result, the employees absorbed as much learning in 30 days that would take 4-6 months in normal circumstances.

While CEOs continued to regularly connect with employees, I personally wrote a series of communications every week, sharing how the businesses were dealing with the lockdown, and what employees could do during this time to add value to themselves and the business. Through these emails, I also asked employees to directly write to him with their ideas.

Starting May 2020, all the subsidiaries of ABCL came together to introduce themselves individually to all customers, to ensure category awareness. The company ensured that customers had access to their entire bouquet of protecting, investing and financing solutions to meet all their life’s needs, related to money.

They started with emailer campaigns to all customers, one business every week.

On the wellness side, ABCL's health business conducted virtual yoga classes, talks by nutritionists, virtual fitness classes and mental health sessions through Facebook to help keep employees and customers healthy. Starting in March, ABCL created a dedicated social media platform for advisors to go live every week, to advise customers and prospects on how to look after their health and wealth. These lives reached 2 million (20 lakh) customers each week, and 2 lakh customers and prospects participated in the sessions each week.

Learnings from lockdown
First, we learned that working from home certainly worked and not everyone needed a place to sit in office. Second, one doesn’t always need to travel to engage. Connecting digitally can be as effective. Third, we don’t always need classrooms to build capability.

Fourth and last, digital is the only way forward. Even some of the company’s older customers and advisors, who initially stayed miles away from digital, started using their apps. I believe that this is the push everyone needed to truly adopt digital. Unfortunately, it took a global pandemic to make digital a part of life; now the entire financial services sector needs to start rethinking everything within the digital frame.

The writer is Chief Executive of Aditya Birla Capital

The thoughts and opinions shared here are of the author.

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