India Insurance From the Teens to the Twentiesficci-insurance.com/fincon19/1.pdf · inspiration e.g. Pet Insurance It has 320+ interest groups in

MUMBAI,0 3 MAY 2019

India Insurance – From the Teens to the Twenties

FINCON 2019

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Insurance industry of voting age –

What a journey!

Life Insurance

FY01 FY09 FY19

# of players 5 22 24

AUM (Rs. Lakh Cr) 2 9 36**

Insurance density

($ per capita) 9 48 55

(2017)

# of lives covered* (Cr) 0.7 5.4 22.5

Total PAT excl. LIC

(Rs. Cr) -250 -5,800 6,100

(FY18)

# of profitable players 2 5 18 (FY18)

*Value estimated based on group schemes **Projected based on historic trend (xxxx) – Period with availability of relevant data Source: IRDAI public disclosures

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Non-life (+ SAHI) Insurance

FY01 FY09 FY19

# of players 9 21 34

GWP (Rs. '000 Cr) 9.8 33.5 170.1

Insurance density

($ per capita) 2 7 18

(2017)

Total PAT excl. AIC,

ECGC (Rs. Cr) -70 350 6,250

(FY18)

# of profitable players 5 11 18 (FY18)

*Value estimated based on group schemes (xxxx) – Period with availability of relevant data Source: IRDAI public disclosures

Insurance industry of voting age –

What a journey!

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The "ties" bring promise and challenge

1 Rapidly evolving customer behavior

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Which channel do you prefer for

research about insurance?

86

63 60

37 40

14

>6 <4 4-6

Non Traditional • Insurer website

• Aggregator,

• Call center

Number of categories bought by

respondents online

<4

56%

4-6

61%

33%

>6

Do you use insurance co. website and app

for purchase, renewal, service requests?

BCG-FICCI Insurance survey (2019), n = 3300 Digital purchase behavior defined basis number of categories consumer buys online: <=3 Low, 4-6 Medium, >=7 High

Customer behavior evolving rapidly

Survey insight: Increasing online engagement and purchase of insurance

Traditional • Agency

• Banca

• Direct

1

Number of categories bought by

respondents online

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What is your willingness to buy these non traditional general insurance products? Pediatric, Dental, Wedding, Jewelry, Commercial auto, Watch, Tablet/Computer, Mobile screen, Spectacles

77%

Source: BCG FICCI Quantitative survey (2019), n = 3300

1

Customers who said

they will most likely or

definitely buy

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6 Source: BCG FICCI Quantitative survey (2019), n = 3300

1

How likely are you to buy an insurance policy from these channels? Ecommerce portal, chat platforms, aggregators (cab), payment wallets, telecom providers, multi product stores, neighborhood shops

88%

Customers who said

they will most likely or

definitely buy

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Innovative products – personalized, bite sized, bundled and dynamic pricing

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Innovative products (1/2)

Protection while you explore Do-it-Yourself Insurance

• Short tenure products – (1-2 years) protection products for low

ticket sizes

Insurance is a big

commitment and

requires detailed

research to be done customers found it

Useful in India

Bestow offers 2-year term life without

medical checks

Successful online 1-yr life policy –

Rakuten Life Super 2000

Existing insurance

products don't cover

my specific needs customers found it

Useful in India

• Tailor products completely – Add/remove benefits (e.g.: cover

only most common diseases)

• Pre-sale & Post-sale flexibility

62%

63%

Source: BCG Survey

2

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Innovative products (2/2)

Savings for masses Impaired life offerings

• "Flex-in / Flex-out" as liquid as an MF

• Attractive returns above savings account / fixed

deposits

Company should

provide policies

which help

customers like

me get money at

shorter intervals

customers

found it Useful

in India

• Partner with players in

healthcare space to help

customers' longevity

Enhanced life annuity products have taken off in UK

Group products for interest

based groups

Bought By Many is using interest groups as product innovation inspiration e.g. Pet Insurance It has 320+ interest groups in <3 years

Tailored group products for

interest groups. For instance

– Young families

– Newlyweds

– Health support groups

Savings for masses Impaired life offerings Group products for

interest based groups

70%

of Indians

diabetic

8%

of Indian deaths

diabetes related

2%

Source: BCG Survey

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3

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Rapidly evolving customer behavior

Innovative products – personalized, bite sized, bundled and dynamic

Digital partnerships and ecosystems

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Ecosystems for holistic coverage of needs

Food

Recovery Wellness

Monitoring

Fitness

Emergency

Elderly care OPD

Health

75+

Partners in the

ecosystem create by

Discovery in South

Africa

3

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4


Non-traditional participants

Digital partnerships and ecosystems 3

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Non traditional players – across categories

Ride Hailing

Airlines E-Commerce Social Media Technology

Automobile OEMs Telecommunication

4

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5 Going Bionic – customer and distribution journeys





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Going Bionic – customer and distribution journeys

6 InsurTechs – Collaborators or Competitors





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Global InsurTech landscape evolving rapidly India will not stay behind

$2 Bn Investment in InsurTechs in 2018

vs. $500 Mn in 2014

InsurTechs are disruptors, 47%

collaborators 53%

Investment in P&C vs. Life & Health 60:40

$1.5 Bn Investment by insurers in last 3.5 years

Source: BCG Analysis

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InsurTechs leveraging technologies such as AI, IoT, DLT & Robotics 6

Source: BCG FinTech Control Tov1er

• Granular pricing

• Risk modelling

• Tailored products

• Customer

engagement

• Risk assessment &

prevention

• Claim settlement

• Policy handling

• Accounting

• Fraud prevention

• Back office

automation

• KYC processes

Artificial

intelligence (Al)

Internet of Things

(loT)

Distributed

Ledgers

Technologies Robotics

Example

lnsureTech

leveraging the

tech

Top use cases

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InsurTechs – Collaborators or Competitors

Dealing with new investor communities





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Riding the regulatory waves





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Industry imperatives

Increase awareness and

penetration of insurance –

industry positioning and

branding

Product innovation – byte sized,

pricing: customization, product to

services, dynamic & real time

pricing, TP de-tariffing, …

Industry wide data platforms:

Insurance bureaus ala CIBIL

(independent), block-chain,

fraud control, …

Urge/encourage/force/en

able eKYC, eDocuments,

digitization …

Promote Ecosystems:

investment in subsidiaries/

other businesses

Support innovation (incl

InsurTechs) – Regulatory

sandbox

Ownership - enable large scale FII

investments post listing; Indian

control – Strong owners and

governance

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Riding the regulatory waves





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Winston Churchill

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