(GI), the newest addition in the Edelweiss
financial services family, recently began operations in the health insurance
segment. Speaking to Advait Rao Palepu
, Anup Rau
, chief executive officer, Edelweiss
GI, says offering a good product proposition and quality of service will help the company compete with established players in a consolidating market. Edited excerpts:
The general insurance space is indeed cluttered. Our honest endeavor is to offer customers a better proposition than what is available today across products and services. While everyone can claim to offer this, we are backing our intent with concrete differentiators in products and services. I can promise the customer, like everyone else, but I have no credibility unless they experience my service. The customer needs to be given a good proposition here and now. We have done extensive research to get consumer insights and used that to develop our value proposition. Basis the insights we have created specific services to address some of the key customer pain points. For instance, If you look at the industry average, a patient usually has to wait for about 3-4 hours from the time of discharge till the point he/she actually leaves the hospital after completing all the formalities, hence we have zero wait time for discharge if hospitalization is for specific procedures, we offer our customers a guaranteed bed at select hospitals and so on. As you can see, the focus is on customer experience – and this is woven into our products, service and communication.
The focus across all is to keep it simple, digital and as paper-less as possible. Our Agency has already started generating volumes, in fact we have a ready pool of distributors within the Edelweiss Group who we are approaching to become our advisors. A lot of our life insurance agents have got certification for selling general insurance as they see synergies between the two. We have tie-ups with brokers who have gotten us a few corporate clients; we have tied-up with Policybazaar for the online side as well. While online distribution is a critical part of our mix, the truth is that the offline distribution channels still control most of the market. However, online has also emerged as a great source of information and a very important influencer in the purchase decision. Our distribution strategy recognizes the importance of the online medium both for information and transaction.
What are the challenges in terms of managing risks when you are a brand new insurer?
General Insurance is the business of risk management – so to succeed, this has to be an area of expertise. The challenges are different at different life-stages of the organization. At our stage, we need to have the domain expertise to pick and choose the right spaces of us to play in, along with the appropriate risk transfer mechanism through reinsurance. So, developing underwriting capability and appropriate reinsurance treaties is a priority for us. We are also keeping a portfolio view in terms of management the balance between retail and commercial risks, high frequency vs high exposure. Essentially, you have to manage the fine balance of risk, profitability and growth. Like in any other business, high risk – high reward holds true for this business as well, but we are mindful of taking a calibrated approach in terms of increasing risk appetite for some high exposure lines.
What are your thoughts on the new guidelines for motor insurance policies, given that the changes have come about just as the company began operations?
The intent is right, but there will be some unintended consequences which may not exactly favour customers. To begin with, this definitely increases the upfront cost for a customer buying a new vehicle. The IRDAI
has made it easier for the customer by enabling Insurers to offer them 3 options , however, not many customers know that only TP is mandatory and may be misled into thinking that 3- year TP+OD is mandatory. Insurers and OEMs (who control the point of sale) will have to be vigilant for this. A second and equally important concern is that a customer is locked-into a policy for a long term and cannot exercise his/her freedom of choice to change Insurers after a year, in case of a poor service experience. Now the OEMs and dealers who controlled the new vehicle insurance market, will control a much larger share and this will clearly benefit some of the incumbent players. However, this has also thrown up some innovation opportunities; especially with the bundled policy coming into picture. We are optimistic that despite some adjustment pain in the short-term, the ecosystem will ultimately move in a manner that benefits customers.