People think about digital only when it comes to sourcing customers, but the entire value chain needs to be digitized, says Bhargav Dasgupta, MD & CEO, ICICI Lombard
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ICICI Lombard General Insurance Co. has prepared an ambitious growth strategy to harness technology across the value chain post its acquisition of Bharti AXA General Insurance. In an interview, managing director and CEO Bhargav Dasgupta comments about the focus areas for the company as the business environment gradually improves. Edited experts:
You have recently acquired Bharti AXA. What was the rationale there?
The thought process behind the Bharti AXA transaction was that we believe the industry is really ripe for some consolidation. As a leader, we wanted to play a role in initiating that. We believe there are lots of synergy benefits. One, it’s a great house—Bharti house. It’s a great name. We believe coming together, there are a lot of revenue synergies, and Bharti AXA’s distribution platforms can scale up significantly. We can add more products to them. Also, we can add more geography to them because we are present in more interiors of the country than they were at. Overall, the coming together obviously will provide a fair amount of operational synergy in terms of the operations.
Insurers are increasingly using data monitoring tools to evaluate customer risk profiles. Do you feel there’s a fundamental conflict in getting customers to agree to this kind of data monitoring?
We have just begun experimentation on the retail side. So, I really can’t predict how people will behave with certainty. But in the corporate segment, we’ve seen people really value it because, you know, almost every sensible corporation buys insurance for protection against risk. So, if you can demonstrate to customers that with some of these capabilities, insurers can reduce the claim frequency, which in the long term benefits the client by reducing the premium. So, it’s a win-win-win. It benefits a client. It benefits us and, honestly, even benefits the economy and society at large.
We see the advent of asset-light and digitally focused insurers across retail segments. How do you plan to counter the rising competition from these smaller and nimble-footed rivals?
Our research with customers tells us that there are multiple channels through which a customer wants to buy or experience insurance today. There are segments of customers who research online and purchase online. There are segments of customers who research online but then go back to an agent and maybe negotiate a price. There’s a segment of customers who talk to a bank and buy, and there is a segment of customers who go to the motor dealership and buy. So, our view as a scale player is that we have to be present wherever the customer is, so you have to be omnichannel. Typically, people think about digital only when it comes to sourcing customers, but the entire value chain or the entire processing within the organization needs to be digitized. That’s what we are trying to do.
How do you feel about the current regulatory environment for insurers?
I think the direction for the regulation has been to make it more and more customer-centric. So, if you look at it, IRDAI (Insurance Regulatory and Development Authority of India) was probably one of the first regulators to set up what is known as IGMS (Integrated Grievance Management System). They’ve been tracking grievances, complaints, etc., but the number of complaints that the general insurance industry gets as a percentage of policyholders is one of the lowest. And this is a direction that the regulator has been pushing the industry.
What would be your strategy organically and inorganically from here?
If I look ahead, I think, given the underlying pressure and the dynamics, market share is migrating to four or five players in every sector, and there will have to be some amount of consolidation, whether it will happen tomorrow or another two to three years, that can be debated. But if I look at a five-year horizon, I think there will definitely be more consolidation.
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