Podcast description

Welcome to IL Café.

ICICI Lombard has brought in several innovations over the years. During the pandemic, the company embraced digital transformation, providing services that prioritized customer safety while striving to make important services like claim settlement easier at a very difficult time for everyone. The lessons learnt during the pandemic have led to a transformation in the company’s approach. There is now an increased emphasis on customer safety, digitalization, toward sustainability at the institutional level, and many other aspects that benefit customers. For instance, ICICI Lombard has taken many steps to become much more customer-centric in order to help settle claims in a hassle-free manner.

Our guest today is Mr. Sanjay Datta, one of the most experienced and accomplished professionals in India’s insurance sector. Sanjay is Chief- Underwriting, Reinsurance and Claims at ICICI Lombard. He has nearly 35 years of experience in General Insurance, and was part of the startup team at ICICI Lombard in 2001. He is in charge of the underwriting and claims division across ICICI Lombard, and also heads customer service for all product lines of the business. Sanjay spearheads underwriting discipline, operational excellence, product development and pricing across Wholesale and Retail products.

Sanjay, welcome to IL Café.

(This is all tied together with the overall emphasis on providing value to customers.)

Q1. You must have also experienced a change in customer purchase behavior in recent years. What innovations has the company brought in the claim settlement process, and how have they changed the way you respond to customer queries?

• Individual as a customer
• Overall market environment from a macro perspective
• Innovative/new products that helped customers during the pandemic (which we will explore in a bit more detail in a minute)
• Health-related example/testimonial of customer experience in claim settlement
• Infrastructure and response times

Customer behavior:

• Contactless interactions
• Increased comfort with digitisation and technology
• Value-added services, roadside assistance etc.
• Customers now well aware and demand smart solutions
• Increased comfort with digitisation and technology

Q2. Speaking of customer friendly services, ICICI Lombard is not new to digital services for customers. However, the pandemic had a significant impact on the insurance industry and digitalization. How did ICICI Lombard embrace digitalization in order to meet customer demands given the pressing demands during the pandemic, especially in the early months?

• Pandemic & the digitalization imperative: Digital first mind-set and view technology as an enabler
• ICICI Lombard was already digitalizing at a healthy pace even before the pandemic. This is also because of the overall, organization-wide emphasis on customer-centric solutions that make life simpler for ICICI Lombard customers.
• We never want the customer to be lost or confused in all the jargon or processes. The consumer must be able to trust the process we have in ICICI Lombard. While we do want to enable self-reliance through digitalization, it’s not like one buys a policy and is then left to fend for themselves. We view ourselves as partners and not just as a player.
• Developing simpler processes that allow DIY for the customer, thereby making the insurance/claims process much more convenient.
• The adoption of telematics ensures a fair price for car insurance customers as it increases affordability for those who drive less and practice safe driving habits.
• It also helps insurance providers to accurately determine accident damages and reduce the number of fraudulent claims.
• Health Innovations at ICICI Lombard: Home health Care- 1st insurer to introduce home healthcare cover at no costs right at the very start of the COVID 19 pandemic in 2020.
• BeFit– a 100% cashless OPD solution serviced entirely through our mobile application – IL TakeCare App – one stop solution for all insurance needs. Widely accepted by customers with more than 2 million downloads
• Golden Shield- Designed exclusively for elderly customers
• Market first feature- life time discount on premium for customers who’ve taken the conjugate pneumococcal vaccine as pneumonia may prove to be risky for this segment.

Q3. I want to focus on an important area, where claims are often a source of much frustration: motor insurance. How has the claim settlement process changed for products like motor insurance in ICICI Lombard?

• From innovative insurance products to Artificial Intelligence (AI) based premium calculation, technology has impacted this industry in multiple ways. In Motor Insurance, the insurers have adopted a concept called 'Usage Based Insurance' (UBI) where telematics solution is used to monitor the risks associated with it.
• These telematics devices record the driving patterns of vehicle owners, including the distance travelled by them each day, the average speed at which a vehicle is driven, and how safely it is being driven. There are 2 types of propositions under UBI.
• Pay as you use - Telematics based car insurance plan that helps you insure your car at really affordable prices depending on your usage.
• Low premiums based on the kilometers you drive.
• Customer can track your usage, remaining balance and top up powered through the connected telematics device app
• Pay how you drive - Telematics based car insurance plan for which the premium is calculated on “how you use” based on your driving behavior. The better and safer you use, the less you pay!
• Low premiums based on how you use
• Customer can opt for the insurance type as per eligibility and pay the premium on a quarterly basis which will be based on the driving score.
• ICICI Lombard is one of the few insurers in India that uses this technology to offer vehicle-specific motor insurance policies. ICICI Lombard is currently providing a telematics device-based plan IL-Assist for private vehicles. Currently we have 20,000 + active customers on telematics product and platform.

Q4. The travel industry, as a whole, has been facing a torrid time. How has ICICI Lombard worked with the travel industry, travel companies, etc. to help improve things. Say, things like claim settlement process for products like travel insurance...

Voyager Travel Insurance: The new covers under this product, caters to the evolving needs such as self-driven holiday, cruise etc., and reflects the changing lifestyle and preferences of travellers. A single solution for group and corporate coverage, this product covers both domestic and overseas travel.

Q5. You spoke about trust. From a larger perspective, if we were to simplify the insurance business, that’s a big factor, isn’t it? I must mention here, for the benefit of our listeners, that ICICI Lombard has an industry-leading ratio in settlement of claims. How has ICICI Lombard worked towards building trust with customers, towards establishing such relationships?

• Delivering the product/ Delivering on the promise when the customer needs it
• Company’s values, mission, which place great importance on customer fulfilment.

Q6. As a veteran who has seen the general insurance industry grow and evolve, what, in your assessment, does the future look like for general insurance? Also, with regard to claims specifically - what trends do you believe will shape the future?

• It is important that we keep evolving and introduce relevant technologically-enabled solutions for the benefit of our customers.
• As an insurer, we are excited about offering comprehensive range of health care services and minimising the gaps in healthcare.
• The new product guidelines by IRDAI will further enable new and fast insurance solutions to customers.
• Awareness on Telematics solutions and Technological advancements amongst customers will play a pivotal role in the success of Telematics propositions. This would require equal efforts from all stakeholders.
• The adoption of telematics will bring volumes necessary to break price barriers. Insurance companies can minimize the losses and reward customer

Q7. What was the intent behind the 'use and file' regulation? While it will make product launch faster, will it not dilute product quality? Why?

• The “Use and File” procedure is one of the major reforms taken up by the IRDAI in order to improve the ease of doing business.
• It has allowed Insurers to bring health and general insurance products to the market at a faster frequency devoid of pursuing the regulator’s prior approval which in turn will help in evading longer waiting durations.
• At the same time, it is the responsibility of the insurers to ensure that the filing of products is done as per the board approved process safeguarding the price viability, self-sustainability and affordability.
• Keeping the policy holders’ interests on forefront is the obligation of all insurers while launching variety and quality products for different customer segments.

Q8. Why have the premiums risen so sharply in the past year or so? What is the future trend?

• Many of the insurers have been impacted in the last year by the steep rise in average claim size due to increased numbers of elective surgical procedures post the pandemic.
• Hence insurers are looking at premium revisions of their health insurance products.
• The upsurge in hospitalization costs due to new advances in medical technology accompanied with customer behavioral changes like single room occupancy, additional precautionary diagnostics and inflated prices of non-payable items are primarily linked with the premium revision.
• With the Indian healthcare progressing in an enormous way, these changes are anticipated in the health insurance market.

Q9. Why is the healthcare inflation so high in India?

• This is because the cost of medical treatment, equipment and medicines is increasing at a far greater rate than other commodities and services.
• It is natural that with age, insurance premiums would get costly. But due to rising inflation, the impact is more severe.
• The demand for health insurance in India remained strong in FY22, with an overall growth of 25%, despite high medical inflation, according to the Indian Health Insurance report by Motilal Oswal Financial Services Limited (MOFSL)
• Among Asian countries in 2021, India had seen the highest medical inflation rate of 14%, followed by China (12%), Indonesia (10%), Vietnam (10%), and the Philippines (9%).
• The cost of medical treatment in India went up by 7.21 per cent in April this year, according to data from ministry of statistics and programme implementation. From medical procedures to medicines, everything has been attracting a higher price tag.