 "For us, health and retirement planning is a priority: Trevor Bull")
Aviva Life Insurance India has now adopted a five-year plan to develop its growth path in the country and learn customer engagement from peer industries. In an interview with M Saraswathy, Aviva India MD & CEO Trevor Bull talks about the company’s future growth strategy. Edited excerpts:
What is the growth strategy for the company?
When I came in, there was a need to develop a growth path in India. We needed to look at where we were good and where we needed to do more work on in a three-five year basis. We knew that we were one of the leaders in online insurance, child insurance and in products for families around children.
Since at this point, our business is primarily retail, we wanted to learn from other retail industries of best practices in retail distribution. We realised that we are not as good as other industries in customer engagement. As part of this plan, material growth year will come from the third, fourth and fifth year onwards. Here, digital will be the core to everything we do and would allow customers and us to spend more time engaging.
Will this include a product focus like the Unit-Linked Insurance Plan (Ulip) emphasis which are a lot of your competitors in the industry are into?
For some companies, it is a big focus. We do not want to be stuck on any one product. We want to find a way where the products and services around the products are good. There could be some tie-up with another vendor which marries the product with an add-on solution.
For us and customers, on top of the mind is health and retirement planning. The varied lifestyles and its nuances and how to meet these needs will become different. Coming up with one Ulip product will not fit anymore.
We are looking at specific solutions aligned to these lifestyles. There are untapped areas like female segment, where there aren't products tailoring to their different life-stages.
A lot of overlap is happening between life, general and health insurers with respect to some products. Do you see this as an issue? Are you looking to launch more products in this space?
It is a big market and there is tremendous demand for health insurance, since there is no major safety net. Health solutions are needed. Life insurances are still longer term but others (general and health insurance products) are in the two-three-year period. At the moment, we have a unique area of long term as life insurers.
Health is one of the areas on top of the mind for us, apart from retirement and children and family around children. We want to offer a total proposition, rather than a simplistic product.
Persistency has been an issue in the industry, as contracts are not getting adequately renewed. Have you also faced this concern?
For life insurers, the break-even for some products varies. Long-term persistency is important but bottom-line is that you need to give better customer outcome. This is the top of agenda for the regulator as well. We have put in some extra focus on it as well. Our 25th month persistency has improved quite a bit and some of our banks have also seen improvement in persistency. Further, in the compensation for individual agents, we have put in focus on persistency for their rewards, so that in the end people should be paid for results that are good for company and customers.
Your foreign partner has announced its intent to raise its stake to 49 per cent.
Aviva has said they would increase and we are delighted. They recently announced their intent and it is positive news for us.
There have been some concern about goodwill being written off in India by the UK-based firm. How would you respond to that?
There is no concern. Goodwill is something that every company including an insurance company has on its balance sheet. Some have it at as a tangible asset, some have it as an intangible asset. This was an intangible asset. It was decided well before some time ago that would write off intangible assets, not just in India but in others countries as well. There was write-off in goodwill for India last year, but no write-off this year. There is nothing new.
This has no correlation to the intent to increase the stake. Both shareholders are committed to the growth of the company in the long term. They are here to stay, especially with the additional focus on digital initiatives. They are here for the long run and have been investing heavily in the Indian operations.
What is the growth strategy for the company?
When I came in, there was a need to develop a growth path in India. We needed to look at where we were good and where we needed to do more work on in a three-five year basis. We knew that we were one of the leaders in online insurance, child insurance and in products for families around children.
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We then used specialists, including large consultants to understand certain buckets for future growth. We wanted to understand customers in India and to put them into different lifestyle buckets and look at future trends in their lifestyle.
Since at this point, our business is primarily retail, we wanted to learn from other retail industries of best practices in retail distribution. We realised that we are not as good as other industries in customer engagement. As part of this plan, material growth year will come from the third, fourth and fifth year onwards. Here, digital will be the core to everything we do and would allow customers and us to spend more time engaging.
Will this include a product focus like the Unit-Linked Insurance Plan (Ulip) emphasis which are a lot of your competitors in the industry are into?
For some companies, it is a big focus. We do not want to be stuck on any one product. We want to find a way where the products and services around the products are good. There could be some tie-up with another vendor which marries the product with an add-on solution.
For us and customers, on top of the mind is health and retirement planning. The varied lifestyles and its nuances and how to meet these needs will become different. Coming up with one Ulip product will not fit anymore.
We are looking at specific solutions aligned to these lifestyles. There are untapped areas like female segment, where there aren't products tailoring to their different life-stages.
A lot of overlap is happening between life, general and health insurers with respect to some products. Do you see this as an issue? Are you looking to launch more products in this space?
It is a big market and there is tremendous demand for health insurance, since there is no major safety net. Health solutions are needed. Life insurances are still longer term but others (general and health insurance products) are in the two-three-year period. At the moment, we have a unique area of long term as life insurers.
Health is one of the areas on top of the mind for us, apart from retirement and children and family around children. We want to offer a total proposition, rather than a simplistic product.
Persistency has been an issue in the industry, as contracts are not getting adequately renewed. Have you also faced this concern?
For life insurers, the break-even for some products varies. Long-term persistency is important but bottom-line is that you need to give better customer outcome. This is the top of agenda for the regulator as well. We have put in some extra focus on it as well. Our 25th month persistency has improved quite a bit and some of our banks have also seen improvement in persistency. Further, in the compensation for individual agents, we have put in focus on persistency for their rewards, so that in the end people should be paid for results that are good for company and customers.
Your foreign partner has announced its intent to raise its stake to 49 per cent.
Aviva has said they would increase and we are delighted. They recently announced their intent and it is positive news for us.
There have been some concern about goodwill being written off in India by the UK-based firm. How would you respond to that?
There is no concern. Goodwill is something that every company including an insurance company has on its balance sheet. Some have it at as a tangible asset, some have it as an intangible asset. This was an intangible asset. It was decided well before some time ago that would write off intangible assets, not just in India but in others countries as well. There was write-off in goodwill for India last year, but no write-off this year. There is nothing new.
This has no correlation to the intent to increase the stake. Both shareholders are committed to the growth of the company in the long term. They are here to stay, especially with the additional focus on digital initiatives. They are here for the long run and have been investing heavily in the Indian operations.