Digital, an important contributor to having one of the Industry’s lowest expense ratio for ICICI Prudential Life

ICICI Prudential Life has taken a slew of digital initiatives in the areas of customer onboarding, robotic process automation and big data to make insurance an attractive proposition for customers, deliver superior customer service as well as to lower its expense ratio. EC’s Abhishek Raval speaks to V.V. Balaji, Chief – IT & Operations, ICICI Prudential Life Insurance

ICICI Prudential Life has employed the digital platform effectively to lower its expense ratio, the portion of premium used to pay the cost of acquiring, underwriting and servicing insurance, reinsurance and other overheads.

And so far the results have been very promising. For instance, the company has successfully leveraged technology to bring down customer complaints and improve their experience. As V.V. Balaji says, “Our customer grievance ratio was at 185 for every 10,000 new policies sold in FY15. It has since dropped to 95 for every 10,000 new policies sold in FY17.”

According to Balaji, the digital strategy has enabled ICICI Prudential Life to improve its efficiency across processes and product segments, and achieve one of the lowest expense ratios in the life insurance industry.

The digital approach is in line with MD and CEO Sandeep Bakhshi’s avowed intent — “We want to be a technology company selling insurance” — which is indicative of the company’s thrust on IT in all its business operations.

Technology is not just helping ICICI Prudential Life to become a leaner, efficient and profitable enterprise; it is also enabling the company to simplify insurance as an protection and investment tool, clear misgivings about insurance, make it easier and convenient for customers to navigate through the labyrinth of products, and buy the right policies to fulfil their financial goals. Tech-savvy customers, especially the Millennials and Gen-Next, are already using both online and digital platforms to buy insurance products at the click of a mouse.

Thus, technology has formed the core of business operations at ICICI Prudential Life, where the employees across verticals understand technology as well as any CIO.

The first major technology initiative was to make the eKYC process simpler for the customers and the company. “Our systems were connected with the Permanent Account Number (PAN) database so that we could check online whether it actually belonged to the person. The Aadhaar platform is used to pre-populate customer information in the application form. This has two benefits: customer authentication and 70 per cent auto-population of the application form,” Balaji explains. “One must note that it is a tedious exercise for the customer to fill the form because of the multiple fields. eKYC has become critical as, historically, the KYC process has been the subject of many frauds both in India and globally.”

The eNACH initiative by ICICI Prudential Life allows customers to give standing instructions for making direct debit payments for premiums or any other purpose. This is one more step towards paperless transactions.

The company is also using technology to make customer engagement easy for its sales force. The total number of staff working directly and indirectly with ICICI Prudential life is in the thousands. These include agents, bank partners, brokers and proprietary sales force among others. They need to be kept up to speed on the various changes in the product specifications, introduced from time to time to ensure correct information exchange between the seller and buyer.

For example, a system has been put in place to provide real-time updated information to the sellers on their devices. This data is provided in as many as 12 languages. The mobile device also serves as a virtual “sales office” where the seller can send alerts and service the customer in many ways.

“We maintain complete transparency while discussing the policy with the customer. The backend rule engine, as per the threshold set, tells us whether medical checks are required and when the policy would be issued. The result: Employee productivity, which was at Rs 42.6 lakh per employee in FY15, increased 30% to Rs 55.5 lakh per employee in FY17,” says Balaji.

Robotic Process Automation (RPA)

More than 500 backend processes have been RPA-enabled, particularly in areas such as HR, services, new business, payouts, IT back jobs, investment operations etc. Different kinds of RPA are in use, one of which is rule engine based. RPA is also used to fetch data from one system, process it and use it in another system. It is also used to connect different systems to the policy administration system. RPA also facilitates reconciliation with regard to customer bank statements, debit and credit card payments, and other data.

ICICI Prudential Life has bought IBM’s chatbot platform for internal purposes. It will be recalibrated and launched for the benefit of customers.

Big data to keep fraudsters at bay

Some 75-80 per cent of frauds are committed by people associated with the primary policy holder. The solution to this problem lies in identifying the culprit at the underwriting stage. The company is using data analytics tools to pick up the wrongdoers. Balaji explains, “If a doctor in some area wrongly diagnosed a person five years ago and then he issues a death certificate for a fraudulent customer, the tool will instantly identify him as one and the same doctor, and a repeat offender.”

In addition to big data, other instruments such as eKYC, Aadhaar and databases also help to keep fraudulent customers out of the system, automatically improving the claims settlement ratio.

“Our claim settlement ratio was 93.8 per cent in FY15, which increased to 96.9 per cent in FY17. The average turnaround time to settle claims came down from 5.59 days in FY15 to 3.05 days in FY17,” Balaji reveals.

Blockchain

Fifteen insurance companies have joined hands to form a Blockchain Proof-of-Concept (PoC) to share data and prevent fraudulent claims across the insurance sector. Imposters usually operate through multiple insurers which often results in claims being paid to the fraudsters and casting suspicion on genuine policyholders. It is here that the PoC helps to expose the culprit and bring him to justice before he buys a policy for raising a fraudulent claim or files a wrong claim.

The Blockchain PoC is a big help particularly during customer onboarding; for instance, a company can use the Blockchain to access a customer’s medical records and prevent him or her from repeat medical tests while applying for multiple policies.

The initiatives under the Blockchain concept, which initially took off on WhatsApp groups, are expected to go live by Q3 FY19.

In the current financial year, ICICI Prudential Life’s focus will be on expanding the use of APIs (application programming interface), especially in internal operations, Chatbots and Artificial Intelligence.

“For AI, the company is beyond the PoC stage and by next quarter, the initiative will be live. The PoC has been done in the area of underwriting, claims management and customer query management. AI will provide a more granular understanding, which Chatbots are not capable of providing,” V.V. Balaji concludes.