AgTalk | Our most important strategy is innovations: IndiaFirst's P Nandagopal

Launched in November 2009, the Mumbai based IndiaFirst Life Insurance is one of the youngest life insurance companies in India with a rich legacy of over 360 years of combined service of its promoters - Bank of Baroda, Andhra Bank and Legal & General. The company aims to do things innovatively by bringing together a real understanding of the Indian consumers by the promoter banks with international best practices developed by Legal & General. The company has focused on the Bancassurance model leveraging the existing branch network of over 5000 branches of its promoter banks across the country. It plans to further strengthen its distribution reach through the alternate channel of distribution. This combination of domain expertise, customer knowledge, product innovation and nationwide reach has helped IndiaFirst to garner Rs 1000 crores premium during FY 2011-12 and cover over 1.6 million lives (till 31st March, 2012) across more than 1000 cities and towns in India.
 
Behind the success IndiaFirst is an industry veteran, P Nandagopal, MD and CEO – an achiever who has successfully managed and lead the team to achieve that had been visualized, the company’s vision to, ‘Become a life insurance and pension business leader in providing significant value for all stakeholders through true customer delight’.
 
Nandagopal has worked for over 25 years in India’s leading Banking, Asset Management, Financial Advisory, General and Life Insurance organizations such as DSP Merrill Lynch, GIC Asset Management, New India Assurance, Andhra Bank, Indian Oil Corporation and as President & CEO Reliance Life Insurance. He is an MBA and a PhD besides a being a Fellow of Institute of Company Secretaries and Fellow of Insurance Institute of India. He wrote several articles on mutual funds and financial planning for various news papers and journals including Wall Street Journal and authored a book on financial planning titled “Investors’ Handbook”. He has chaired and is a frequent panel speaker in several national and international conferences.
 
Nandagopal spoke to Adgully on the various initiatives at IndiaFirst and the industry in general recently. Following are the excerpts of the conversation.
 
Adgully (AG): IndiaFirst is a fairly new company despite having strong parents. How did the thought of foraying into insurance come about, a field where the competitors are fairly well entrenched?
 
P. Nandagopal (PN): Let me elaborate. First of all we have two advantages. One is the last mile advantage, which is the single most advantage. I can always learn from the experience of other insurance companies and keep on improving my processes. The second is that we have supporting promoters who gives me access to their customer databases. Hence we are definitely in a privileged position to instigate an initiative like this. In insurance, unfortunately, that gets very complicated. So we thought of how to solve this problem. One is simplified domain language & communication. But still that does not ensure that the customer will spend atleast an hour reading 15-16 pages of the policy document. Therefore we felt we need to identify atleast 5 or 6 features, risk factors and advantages that help to initiate a conversation about the policy. It is very difficult to make conversations uniform in the insurance industry. As a solution we use the visual medium through product audio visuals to make the customer understand the features, risk and advantages in order to make better, powerful communication.
 
AG: Do you think the customers will actually see the visual medium and invest in insurance?
 
PN: People who need financial protection - they may be buy insurance policies, may not. But it is not necessary that customers take rational decisions every time based on the information provided because that itself may be inaccurate or be half truths. However if you remove the discrepancies through the visual medium, we believe people who need insurance will buy it, though it’s not necessarily all should buy it at that moment itself.
 
AG: What is the size of the industry and where do you stand?
 
PN: I may not give exact numbers but the industry is roughly about Rs. 1 lakh crores in new business premium every year and we are about one per cent of that; we did about Rs. 1000 crores last year. We intend to increase it by 20% by the end of this fiscal year. Therefore the industry is very big and we at one percent are currently very small. But I want to ensure that in the overall grand scheme of things (comprising 24 insurance players) and given the competitive scenario, we are still keep moving up. Last year we were at the 10th position (amongst the private life insurers) and our aim is to be amongst the top quartile companies.
 
However our primary objective will always remain to ensure sustained value for all stakeholders through simple easy to understand products that are fairly priced and efficiently serviced. 
 
AG: You have an advantage because of strong parents and a ready database that your sales teams can chase rather than do it randomly?
 
PN: It is definitely a plus in the sense that I have access to an existing customer database which I can pitch. So that makes my sales process much easier. But that in itself is only a part of the process. I need to establish my presence across channels i.e. bancassurance, digital, alternate channels and others. That is something which is much more difficult in a competitive market but we will have to do it.
 
AG: Share with us the thought behind the recently launched Magicboard which is more like an app that the company is using for the benefit of its customers.
 
PN: I would say that it is not correct that Magicboard is just an app. In fact it is an end-to-end process plus application. It is not just for the customer who is an important stakeholder but for all the stakeholders – distributors who are the intermediaries, employees and the company itself.  All these stakeholders will eventually be seamlessly integrated. So it is an enterprise wide solution. But yes, we have launched only the customer module first and are already working on the other modules which we will launch very soon. We plan to plan one module every 2-3 months.
 
AG: Can you tell us about the various marketing initiatives that the company is taking?
 
PN: We are planning to increase our sales representative team from the current 3000 to 5000 by the end of this financial year. Continuous training is a must in addition to the mandatory training & test that everyone has to clear as per IRDA norms. Otherwise they cannot be on our rolls. Next our product audio visuals which are currently in 3 languages will be launched in 8 more languages in the next 15-20 days. We do not advertise heavily or use the paid media for publicity. Instead we are a company who will invest in solid initiatives like the Magicboard. We believe word of mouth and actual service rendered through our sales representatives, is the best form of publicity.
 
Our Health Card is one more significant initiative where a customer can get benefit of health insurance just by swiping the card at the hospital.
 
Expanding our reach and presence in Tier II and Tier III towns is also clearly our focus. There is a clear cut demarcation as far as penetration is concerned. We are present in 1000 towns and almost every district headquarters in the country. 
 
AG: The Government has recently announced benefits for this sector. How do you look at it?
 
PN: There are benefits at the operational as well as the strategic levels. At the operational level it will improve the efficiency of the product approval process – shorter TATs, so companies can launch products faster. The market is moving fast and so are customer preferences and regulations. Hence this will definitely help improve operational efficiency. Insurance companies typically look at three important areas to drive strategic advantage – improve products, improve distribution and improve overall customer experience.  
 
AG: Do you think these three strategies will give you an advantage?
 
PN: Our most important strategy is innovation. We are focused seriously on the customer side experience. So whatever we sell, we are trying to improve customer experience through Magicboard, Health Card etc. That is a very important strategy and opportunity of us. It will also improve our distribution strategy where my distributors will be much more enabled to advice customers and close sales quickly improving the overall success rate. So if I have a delightful customer and a successful distributor, I am sure we will move ahead in the race.
 
AG: What kind of strategies are you looking at for further expansion and strengthening your position in the market?
 
PN: Apart from Innovation which is a strategy, I would like to mention, IT enablement is a strategy. These are the two we are working on. Apart from these at the end of the day we believe in four values which we think will get us there where we want to be. These four values are - Think New, Be Honest, Be Helpful and Do More.
 
AG: Given the current economic situation, consumers are getting affected and hence spend in everything has become lesser. Do you think this will affect the insurance industry?
 
PN: Yes it will effect in a way. One of the problems that the financial services industry as a whole is facing is that customer savings are moving from financial products to gold and real estate. I believe that will strain the Government’s Balance of Payments (BoP) as gold prices are moving up and gold is imported. The challenge therefore is to move customer’s investments from physical assets to financial assets. For that to happen, investments in financial assets should be more attractive and accessible. Maybe the recent Government initiative will help the insurance industry to offer better products, better processes and better consumer experiences. 
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