)
Private life insurance company Max Life Insurance is looking at a balance between customer needs and business growth through an efficient distribution network. Rajesh Sud, CEO and managing director of Max Life Insurance, explains the company’s strategy to M Saraswathy. Edited excerpts:
Your December net profits and renewals show a growth, while other companies have seen a decline. What strategy have you adopted for this?
Private life insurers have seen flat growth in new sales and renewals. We have grown by 15 per cent on a year-on-year basis and renewals are up by about three per cent. So, total revenue growth has been healthy. We have been six per cent ahead here.
Also Read
We have been constantly reducing our costs and we’re focused on it. Also is the product mix, which is almost balanced or more in favour of traditional. Further, we do not have any profits from surrender profits, so that profits are sustainable.
Wouldn’t the new product guidelines have an impact on the new premiums?
There has been a product transition and almost all products have gone through a change. We have been training and re-training our advisors. Our results from February show we have grown, while others haven’t. It looks like there will be a slowdown, but hopefully, we will grow from there.
You have already introduced several new products. Is the entire product portfolio in place?
We have been alert in this aspect. Last year, we were organised in selling our products at regular intervals with the regulator and we have the highest number, in percentage, of approvals in the industry from the regulator. There are still some products that we have filed; we are awaiting approvals for these.
Max Life introduced the New Work System (NWS) to deal with productivity and agent attrition. What has the impact been, especially since the new guidelines have linked commissions to the tenure of the product?
Our distribution architecture has always been around longer-tenure products. Now, the insurance regulator has also enabled a change in commission structure from shorter to longer-tenure policies.
At our company, the distribution network is tuned around longer-term protection and saving products. NWS helps us leverage technology for an activity management system. Fact-finding forms have moved from paper-based to tablet-based. We have already had a head-start.
Overall, the productivity has gone up due to NWS. It helps in activity management and aids agents to get more regular with business. This has set a rhythm in office and has also helped us leverage our training.
You were planning to tie-up with Max Bupa for a combination (combo) products. Has it been finalised?
We are keen to leverage synergies between the two companies, since we are part of the same family. Customers are also looking at both kinds of protection - life and health. The idea is to leverage it. Combo products did not seem to be an attractive proposition for the customer or distributor.
We are very keen. A large number of agents are selling Max Bupa by getting themselves licensed. We have also opened a distribution company called Max One. What customers want is one individual for different products. Through Max One, health insurance and mutual funds are available for some of our agents (will be called Max One Associates) in Delhi and Mumbai. Started a few months ago, it has got 150 people to sign up. The idea is to scale it up in due course.
Industry players are now devoting their entire resources to improve persistency, especially for the first 24-36 months? What are the structures you have in place to boost renewals?
Our rewards, recognition and compensation structures is linked to persistency. We have a framework that is an international best practice called Treat Customers Fairly (TCF). It looks at whether the customer gets a fair deal during purchase, whether it is transparent and whether it is need-based. We have also invested in analytics and see which customer is more likely to not pay up and have also moved to electronic clearance for policy premiums.
So, systematically all root causes of why even one rupee of renewal was missed out was analysed, solutions found, piloted and scaled up.
