Serving at your doorstep

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Bajaj Allianz Life treats sales and service as integral to each other when it comes to insurance officer serving the rural customers. The rural insurance officer is trained to be the single point of contact for all customers to manage a gamut of functions related to this business "Technology will be a key enabler. With this enabler, we will bring on board our best practices and leverage the experience which we have garnered in the last few years,"

—Yogesh Gupta, Sr VP and Head of Micro and Rural Insurance, Bajaj Allianz Life Insurance

When Jitendra Pradhan, a 23-year-old young farmer from Bhadrak, Orissa died from malaria, the world collapsed around his family comprising of old parents and a younger sister. Jitendra was the sole bread winner for his family and his family’s sole asset was a small piece of land mortgaged for a sum of 100,000 rupees. 

This is a common scenario in several families of rural India. But Jitendra’s family had hope. Just a few months earlier, Jitendra had enrolled in the Bajaj Allianz Sarva Shakti Suraksha (SSS) Plan based on the advice of the rural Insurance Officer at Kalinga Gramya Bank, a regional rural bank in the village. Jitendra had taken this unique savings and micro-insurance plan with the intent of using the maturity proceeds for his sister’s marriage in another five years time. But fate had other things in store for him. Fortunately, his decision to enroll for an insurance plan turned out to be a blessing in disguise for his family.
After Jitendra’s death, the insurance officer at the Kalinga Gramya Bank realised that Jitendra’s parents were too old and illiterate and sister was unable to complete the required documentation for filing a claim. At this point the sales manager of Bajaj Allianz Life Insurance swung into action and stepped in to help the family file the claim. He went beyond his scope of daily tasks to procure the necessary documentation from the local authorities. 

A few days later, the Sales Manager visited the family’s home to handover a cheque of 250,000 rupees which was due as part of the claim benefits under the policy. This amount helped Jitendra’s family get back on their feet. They have reclaimed the mortgaged land, invested the rest in a fixed deposit for future financial needs and opened a grocery store in the neighborhood. 

For the team at Bajaj Allianz, the above scenario is a standard part of their overall deliverable across this emerging business line. Having the largest distribution network in the country, the team endeavors to provide premium services for claim settlement to its nearly 4 million customers of the Sarva Shakti Suraksha (SSS) product. Some of the customer-friendly initiatives implemented are:

  • Cumbersome paperwork required in applying for a traditional product was struck down and the six-page application form was brought down to half page;
  • The premium collection mechanised was dovetailed to suit the paying capability and habit of customer;
  • Highly efficient premium and data collection mechanism, login of same in nearest Bajaj Allianz branch office and system underwriting ensured early issuance of certificates; and, The claims are settled with the help of a partner wherein the Sales Manager who has sold the policy) is responsible for immediate intimations/registration and verification of claim. This nullifies any chance of misrepresentation or fraud thus curtailing the need for any kind of further investigations thereby saving us the cost for the same.
  • One interesting fact is that out of total claims received last year only one was repudiated and that too by the channel partner itself.
  • The experience and the service provided by Bajaj Allianz have resulted into several more rapid enrollments followed subsequently within the community. “Our claim settlement services speak for itself. Word of mouth publicity is what works best, as most people are illiterate within this segment and do not respond well to conventional advertising methods,” confirms Yogesh Gupta, Sr VP and Head of Micro and Rural Insurance, Bajaj Allianz Life Insurance.

Efficient Distribution Model
In a rural environment, it is critical that Sales and Service are not treated as separate functions and the insurance officer performs both for the customer. With this objective in mind, the rural insurance officer is trained to be the single point of contact for sales and servicing for all customers to manage a gamut of functions related to this business.

The company currently employs over 600 rural insurance officers to serve its customers in rural India. These individuals operate in the same community they belong to, and are thus, able to leverage the local environment. Their understanding of local conditions has helped the Insurance Company to augment the current customer satisfaction levels through efficient policy servicing solutions. 

Execution was not an easy task and the team needed a strong belief in this product and operating model in reaching out to segments, which have never been catered to previously.

Tapping New Networks 
Post the initial success of the distribution model with Rural Banks, a need was felt to take this initiative to the next level; to identify rural organisations catering to specific needs of captive databases which could be covered under a simple insurance plan.

One such unique entity emerged in the form of dairy co-operatives catering to millions of rural milkmen across the country. Although the model is yet to receive the same levels of success as the rural banking model, it nevertheless has a social impact contribution of its own across marginalised rural communities. “Micro-insurance demands a ‘need-based approach’. Our distribution approach rides on the current collection and payment mechanisms adopted by the unions thereby ensuring uniformity of service,” says Yogesh. 

This aspect was also recently covered by the Financial Times, Germany. Described below is a case of one of the customers of SSS through dairy cooperatives. 

In Kila Raipur, as the night fog slowly fades away at the crack of dawn, the farmers are on their feet. The cows are milked and cans are loaded onto cycles and motorcycles. Some hours later, dozens of men are standing in front of the collection point at the various cooperatives. The supervisor takes from each pot a test sample, which is analysed in an electronic milk tester to determine the fat content that determines the purchase price. There is no bank in the village, and the money is transferred to the farmer’s virtual account. Every ten days, a representative from the cooperative drives to the district town 30 kilometers away to get the money from the bank and pay the farmers. “This month, I will not have more than 300 rupees,” says Gurumukh Singh. He has to support a family of five. “Only two of my eight cows currently provide milk.”

As a member in the life insurance scheme, Singh pays a premium of Rs 600 per year. “The head of the cooperative has explained the insurance to us,” he says. “My wife insisted on buying a policy, because we have two unmarried daughters and if something were to happen to me, she would not be able to afford their marriage expenses.” 

Even though he has an irregular and small income, the in-built flexibility and ease of SSS makes it possible for people like Gurumukh to continue paying their life Insurance premiums.

How it works
The Bajaj Allianz team works together with the state cooperatives and with local collection points in every village. The cooperative acts as an interface to enroll members and collect premiums in addition to providing policy servicing functions and ensuring reach across a large target group at relatively low operating costs.
“Our team has studied the current environment extensively,” says Yogesh. “We are confident that this model will enable financial institutions to provide more and more efficient rural insurance services to take care of their livelihood related risks, enable financial stability and continuity for their dependents.

The Road Ahead
Having achieved a good measure of success in its forays till now, the team is now looking at collaborating with Banking Correspondents across the country. 

Says Yogesh, “Insurance has been listed as an integral product by the RBI Committee on financial inclusion. Amongst all insurance products, we are confident that SSS provides the best value to the customer due to its cost and services.” 

His confidence stems from the experience which the team has garnered working with similar entities such as MFI’s and RRB’s in this segment. Going forward, Bajaj Allianz is hoping to align with a few major players in this field. “Technology will be a key enabler. With this enabler, we will bring on board our best practices and leverage the experience which we have garnered in the last few years,” adds Yogesh. 
For achieving this, capability building will be key and also determine the long-term sustainability of this model. l

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