The biggest transformation for Indian insurers has been the shift towards online: Rishi Piparaiya, Aviva Life Insurance

A 2014 report by the Boston Consulting Group and Google India predicts that the Indian insurance sector is set for digital disruption, with online insurance sales set to grow 20 times by 2020. The report estimates that  three in every four insurance policies sold by 2020 would be influenced by digital channels during either the pre-purchase stage, purchase or renewal stages.

To get more insights on the increasing trend of digitization, Dataquest spoke to Rishi Piparaiya, Director- Marketing & Direct Sales, Aviva Life Insurance, who shares his candid thoughts on why online is such a huge opportunity.

Some edited excerpts:

1. How has traditional way of selling insurance changed over the years?

The insurance industry has gone through a major transformation with the entry of private players in 2001. In the pre-privatization era, there were two primary sales channels – the company’s own sales force and agency (third party). Today, selling is done through a wide range of channels which include online, corporate agents, call centers, brokers, direct and agency.

To complement these channels, the number of branches and offices of insurance companies have also multiplied. There were only 2,200 life insurance branches in 2001. Today, between 23 life insurance companies in India, there are over 12,000 branches spread across the nation.

However, the biggest transformation for insurers has been the shift of focus towards the online distribution channel. Studies indicate that by 2020, 75 per cent of the sales would be driven by digital channels. Online insurance sales market in India would be around Rs 3,500 to Rs 6,000 crore for life insurance and Rs 11,000 to Rs 15,000 crore for non-life insurance. This is largely because of the rising number of Internet users in the country and the convenience that the online platform gives to the customer.  Also, since online as a medium has a lower distribution cost, the products it offers are cheaper than the offline products, ensuring better returns. There are currently around 15 insurance companies in India offering online term plans. But with the potential it holds, more new players are likely to enter the online market.

2. What are some of the recent technology initiatives undertaken by Aviva, and how have these initiatives helped in improving competitiveness and customer satisfaction?

Three years ago, Aviva India started out on a transformational journey to become a leading digital insurer. In line with this objective, it achieved optimization and improved on operational efficiency and spending. With the Customer at the centre, our focus has been on providing better service and experience.

Betting big on digital technologies and process automation, we have invested heavily in strengthening our core policy administration platform, building up a data integration layer and service oriented architecture, analytics and mobility.

We have launched a few new initiatives like:

A) A responsive design device agnostic self-service portal for customers, enabling them to access their portfolio anytime anywhere resulting in an increased usage of portal by more than 60% in comparison to the earlier version.

B) We also rolled out a tablet enabled sales process, aiming to help the front-line sales persons to sell better. This solution helps the agent to manage the leads better, conduct needs analysis and recommend products to customers. Generating benefit illustrations in front of the customer, filling up forms, collecting documents are some of the salient features of the product.

We further plan to invest on mobility projects and will be developing intuitive mobility applications for customers and revamp all digital assets for making them device agnostic. This will help enhance customer convenience, accessibility and simplicity. We are also planning to spend on enhancing our BPM capability to infuse agility into our processes and will reengineer our internal processes to ensure that they are aligned with our digital agenda.

3. Aviva has also been very active in driving social media initiatives. How has social media helped Aviva in increasing customer engagement?

Social media today is one of the most effective mediums to communicate with customers. It allows one to have conversations with customers unlike any other medium. It’s fast, focused and engaging. At Aviva, we give paramount importance to social media. We have over five lakh engagements on our Facebook page. We are also only the second life insurance company in India to have a verified Twitter account and have one of the highest engagement scores on the micro-blogging site.

Our key focus has been to engage with young parents, to make them understand the importance of sound financial planning in order to protect their child’s future, and social media has been integral in achieving this. Towards this, we have created a community of young parents on social media and reach out to them with parenting tips, contests etc.

Several of our campaigns have been hugely popular on the social media. Our ‘Padding Up with Sachin’ series helped us get over 1.5 lakh views for cricket tutorials. The Aviva brand campaign – ‘Big Plans for Big Dreams’ – has helped us reach out to more than 34 million people online. Aviva’s TVC featuring Sachin Tendulkar was viewed over 1.5 million times on YouTube.

Aviva is one of the leaders in terms of engagement on social media among life insurance companies in India. We have been in the top 3 in engagement rates across platforms consistently and have one of the highest Klout scores in the category. Along with engagement, we are also using social media to increase product awareness by targeting Facebook users with our online plans.

4. How have digital initiatives helped in customer acquisition?

India currently has around 243 million active internet users and is likely to surpass the US in the next two years. This growing number, along with other factors, has massively impacted the insurance industry with the online distribution channel, becoming one of the top revenue contributors. At Aviva, we have constantly focused on the online channel, recognizing the massive potential it holds. In three years, our online channel’s contribution to business has increased from 8% to 25%. The online portfolio also has the highest persistency rate of more than 90%.

Aviva’s success on the digital platform is largely due to our initiatives in process, technology and innovation. We constantly strive to improve the online buying journey of the customer, making it simple, fast and convenient. Customers can buy Aviva’s policies with minimal documentation – the form filling is online and documents like address and identity proofs can be sent through an e-mail or Whatsapp. Along with our helpline, we also have an online chat application through which our representatives can guide the customer at each step. We have a dedicated team for servicing the needs of the online customers.

In terms of brand awareness on the web, along with constant engagement with customers on the social media, Aviva has also tied up with several digital companies like snapdeal.com, firstcry.com and meritnation.com, in line with our focus on the child space.