We’ll look back & say insurance penetration grew due to COVID: Sarbvir Singh, Policybazaar
In today’s segment of ‘Beating All Odds’, Sarbvir Singh, CEO of Policybazaar, speaks to Impact's Neeta Nair
‘At a time when the slowdown has hit businesses across sectors, there is one online insurance marketplace which has, in fact, grown, its business in the past two months. In our ‘Beating All Odds’ section today we have with us, Sarbvir Singh, the chief executive officer Policybazaar.com
Interestingly, you took over as the CEO in Feb and March is when the crisis began. Was it a case of trial by fire for you?
It would seem so from the outside, but there were two big redeeming features. One is that the organization has an extremely solid team, and of course, Yashish Dahiya who is the group CEO now and the founder; he is very active. So, I think while things are a little bit more difficult when you don't have physical access to your resources, there was no fire, to begin with. We have been in good shape and like you said, that showed the business has been doing really well. So there has been absolutely no complaints.
You are one of those rare companies whose sales have managed to go up during the lockdown. What kind of change in consumer behaviour did you witness in this short span and what kind of plans are people buying?
We look at our business in three parts. We have a protection business where essentially people buy health and term insurance to protect against death, disease and disability. Then we have a savings business where people invest to grow their savings over the 10-15 year time period. And then we have the mandatory products, which are motor and two-wheeler insurance.
What's happened in the last two months is that the protection products have grown quite significantly. Insurance is something which very few people wake up in the morning and say, “I should buy that today.” It's a very difficult category from that perspective.
But now when everyone wakes up in the morning, they have some concerns about their health, life, etc. So there is a natural demand for insurance. Hence, I think protection products have done well.
The second thing which has worked very well for us is that all the physical channels clearly are not possible. So if going to an agent or bank branch to buy insurance won't work at this moment.
So having built a digital stack, Policybazaar has done a great job of not only having all plans which you can compare and learn more about but also actually issuing the policy to you.
That’s the differentiation – you are able to come to one side, speak to a very knowledgeable and informed advisor who tells you about the policy and then you can get the policy issued from there. So I think that whole full-stack experience that we've been able to give has really helped us in the last few months.
And I think that's why consumers have preferred to buy from Policybazaar, and that’s why, like you said, our business has been pretty good.
As an aggregator, are you better placed than the bank branch network and the agent network as far as business and getting customers is concerned?
One part is being an aggregator, but I think the more important part is that Policybazaar, is a digital distribution channel. For a lot of people, they are figuring out how to be digital or how to work more, in a sort of contactless manner. Having built that capability, for us that's the business we've been building for the last 10-12 years.
In a way, this issue that has come up has played into the strengths of Policybazaar. We have not been sitting idle; we have been working very hard over the last two months to sharpen this edge.
So let me give you an example, for instance, today you can buy a health policy without any physical or medical on our platform, and we work with our insurance partners to make that possible.
So we have a tele-medical, or in some cases, we have a video medical process. Sometimes, there's a questionnaire.
What we do is make sure that our insurance partners also are able to judge the risk correctly. It's not just about satisfying one side of the platform. So we want to do a good job for consumers. But we also want to do a good job for insurance partners, because they see Policybazaar not only as a distribution channel but also as a profitable distribution channel.
And that's not that's a position we want to keep. We’ve balanced both sides of the equation and offered an alternative which didn't exist, or let’s say was not used as much a few months ago.
You may have seen some of our marketing around this – that you can buy a policy sitting at hoe without going anywhere. And as you can imagine, that's a powerful proposition in these times.
Insurance category is said to be one of the biggest advertisers during the lockdown. As an aggregator, did Policybazaar jump on to that bandwagon?
Historically, Policybazaar has been one of the biggest advertisers in the insurance space. That is pre-COVID, and obviously continuing through COVID, immediately once the lockdown was announced, one of the first decisions we took was that we need to be more visible.
In April, we don’t advertise as much, given it is a lean season. But we took a different call this time because our consumers need to know that we are present and that we can actually service their needs. So we actually advertised more in April than we did even in March.
Being a sort of young startup, we are able to make these decisions fairly dynamically and act on them. I would say, rather than us joining the bandwagon, we prefer to see it as leading the bandwagon. And I think that a lot of people after they saw our success due to our marketing, obviously, have also pushed the envelope on that.
Give us a sense of how much the sales have gone up by?
So, over the last few months, if you were to just look at it, our protection business has gone up by between 40% and 50%. Other businesses have not grown as much, but overall also, we continue to grow quite handsomely and the industry figures are with you, as the industry has had a fairly difficult time in the last few months.
You have traditionally been a TV-heavy advertiser. Does digital advertising become more important for you here, considering that consumption of OTT and digital platforms is on an upswing?
To be honest, we are actually 50-50. If you see almost in any given month, we spend 50% on TV and 50% on digital. As you would expect, being a digital platform, there's no way that we can't be there.
Coming specifically to OTT, I'll be very honest with you, our experience hasn't been super positive. TV works really well for us. When we increase television, we can see the impact on our business; when we decrease television, we can see the impact on our business. On the OTT platforms, especially relative to TV, it hasn't worked as well. So we don't find it very logical to be on those platforms.
We've experimented with them many times. And we will continue to do that because things change. On the one hand, we have a very directed search-led advertising. And on the other, we have brand advertising on television. And both of these actually worked very well for us so far.
You have more than 13000 call centre employees. How have you managed to move the operations to individual homes?
Yes, between Policybazaar and Paisabazaar, that’s correct. That was a big concern for us, because traditionally, while we thought of work-from-home many times, somehow we were never able to make it successful. And here we were faced with literally one week, and we had to move everybody to work from home.
The credit for this entirely goes to our technology, our IT and operations team. It was nothing short of a miracle that in one week we were able to transform all our systems into mobile, procure hardware for our agents, and figure out how the process would work in a WFH environment versus fully 100% work from the office.
The good news is that from the next day that we transitioned, we were at higher levels of productivity than we were before. It helped that we were in March – a big season for us. Our agents also were very keen to continue selling.
Obviously, in the last two months, since then we've improved our processes. So much that now I think we will never have 100% work from office. We have a new business model practically. We'll always have probably 25%-30% working from home.
We will also use this as a blueprint to go into other areas, for instance in the south Policybazaar is not such a strong brand name as it is in the North and the West. What we now feel is that instead of setting up one center in one city, and debating where that city should be investing, etc., now, we could perhaps have two-three cities where we will have very small offices and have agents working from home, who are able to serve customers in the language that they want.
It's very hard to make predictions at this point. But one thing is very clear: we are going to take this business model and grow it. It will also allow us to have a more diverse workforce, especially women, for instance, many times they can't work, in the structured hours that we want them to after they had a kid or something like that.
Now, we can have the best sales agency. As long as you can sell, it's up to you when you want to work. So I think this is going to be a really, a big change for us. And we think we'd be very very positive. We believe that our agents should do well; they should earn more money, and this will actually allow us to give them more money because our fixed costs will be lower.
What kind of changes and innovations have you brought about on your website and apps to keep in line with the COVID-19-specific challenges, like the Telemedical insurance?
It is a consistent journey that we've been on to keep making the process simpler and easier to use. And also what has happened is, over the years, we have had over 10 million customers who have bought policies from us. So now this is a significant base of people who are very aspirational, coming from a very attractive income segment, etc. When these 10 million people come back to us, we can give them a much smoother experience. We know much more about them now. And we can make that process of onboarding much simpler for you. And the second thing, which you referred to, is tele-medical. This is the part when you buy a health or a term policy, where the insurance company wants to do a medical check up on you to make sure that all the things that you've said are appropriate.
In our platform, we are very transparent in sharing all information with the insurer. And mostly, in our case, the consumer fills the form, not the agent. So the declarations are much more transparent. So companies have had a positive experience. They're willing hence to trust our platform more and say that instead of going somewhere to do a physical medical, we will do a medical on the phone with you. And interestingly, data shows that doing a tele-medical is sometimes more accurate than a physical medical.
Consumers, for the most part, actually don't lie once they understand why you're asking them the questions. We found is that they actually are a lot more truthful than what is commonly believed.
Unlike travel and car insurance, when it comes to life and health insurance, people do like to meet an insurance agent to talk about the specifics. Do you see that model change completely post COVID-19 onslaught wherein an insurance platform can provide end-to-end digital delivery of insurance to consumers across the country?
Maybe five or three years ago, even car insurance or travel insurance was not like that. A lot of us would buy from physical agents and you would get a slip of paper and stuff like that.
The journey has moved to digital. Just to give you a sense, over half of the health insurance policies that we sell are actually printed off straight away. If whatever you declare on the form is found to be incorrect, then the claim can be denied. So, the consumer has every incentive to be truthful and honest and as I told you, most people actually are truthful and honest because they understand what the contract is. So over 50% of health policies also can be printed off almost immediately.
On the life (insurance) side, there is a slightly different process because the insurance company has to do their underwriting and, that still takes some time. But, yeah, I think we can clearly envisage a process where slowly over time as we know more and more about the customer, as more and more touchpoints are available, we could one day even print off life policies. So, I think we're moving in that direction. And that innovation is something that Policybazaar has always been at the forefront of and we will keep driving it further.
The biggest complaint of insurance companies is the low penetration of insurance in the country. Has COVID-19 brought about a new sense of urgency and awareness about the importance of insurance that will be there to stay?
This is actually a big trend that has happened in India that over the last 10 years, the importance of health insurance and term insurance has been growing every year. And events like COVID-19 scare make us buy insurance now. And sometimes it's these events which remind you of the fallibility of life and why you need to have protection.
So I think I agree with you, this should be a step of change in the penetration and people should buy more of insurance. I don't want to make it sound like this pandemic is just all good for us. The challenge for us and for everybody is that consumers right now are worried about the incomes. So, there is a balance between saying that I know that I should buy insurance, but I'm also concerned about how much income I'll have. So whether I’ll buy insurance or not right away remains a challenge. It's a balance of many factors. But like you said, I think over time, we'll look back and say that insurance penetration grew because of this event.
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