In a diverse market like India, especially marked by difference in income levels, geography, education levels, access to technology and many more factors, there is a massive push towards creating digital infrastructure and enhancing digital empowerment of citizens, feels Navneet Shrivastava, Co-Founder and Group Chief Business Officer, Finhaat. Since the recent pandemic, the insurance industry has not only seen an increase in the demand for insurance products, but there is a higher integration of technology and use of digital platform - from selling policies online to settling claims, Shrivastava told Rural Voice in an interview. Excerpts from his e-mail interview:
-How do you perceive the customer adoption and readiness for digital insurance solutions in a diverse market like India?
India is a diverse market. This diversity is marked by difference in income levels, geography, education levels, access to technology and many more such factors. Insurance as a product has taken time to get internalised by the vast majority. We see now that there is a greater awareness of Insurance and its benefits.
However, now with increased easy digital access across population, a certain segment of the Indian population is getting on to the digital channels buying products digitally. However, there is a substantial population beyond the metros and tier 1-2 cities – the emerging middle class, that while have engaged with e-commerce, they are yet to engage with financial services digitally.
We believe that we are at a nascent phase of digital adoption for this population, and a lot of work needs to go in building different platforms that give them access, elicit trust and make systems and processes easy for people to believe in insurance as a product that is useful for them as well as will ensure delivery when they claim.
What emerging trends do you see shaping the Indian insurance sector, and how is Finhaat positioned to capitalise on these trends?
Insurance has largely been driven by traditional channels like agencies or third party distribution. LIC, the largest Indian player, has more than 1.3 million agents on the ground that distribute insurance products. However, the digital channel is now seeing higher acceptance both from insurance companies as well as customers.
With the government’s focus on Digital India, there is a massive push towards creating digital infrastructure and enhancing digital empowerment of citizens.
Technology has been a driving force in transforming the insurance industry globally. Can you elaborate on how technology has positively impacted various aspects of the insurance value chain, particularly in the context of Finhaat's operations?
Since the recent pandemic, things have changed across sectors and the insurance industry has not only seen an increase in the demand for insurance products, but there is a higher integration of technology and use of digital platform by means of offering a larger product portfolio, selling policies online to settling of claims. This has not only helped the insurer to increase efficiency and cut down on process redundancies, but also aim at lowering cost of offering services.
At Finhaat, we have an assisted digital model that allows us to service the offerings through product life-cycle by leveraging technology and the presence of partner institutions on the ground. The start-up has reached almost 60 per cent of all Pin-codes all over India.
Finhaat’s key focus is to cover the full lifecycle of the product by leveraging technology. One of the areas where we work extensively is to build curated products and digitise the journey end-to-end.
Once we have curated product for a particular partner institution and segment, we work on following:
Sales Journey: Finhaat digitises the end-to-end sales journey for clients to ensure that we are able to solve the real time access of policies even for bespoke products that are made for a specific institution. Finhaat has built its system to be flexible that has a capability to mimic the organisation structure in terms of approvals and closing sales.
Post sales services and claims: We strongly believe that for these initial sales to become a habit, clients need to see a smooth Post sales support and claims. Finhaat digitises the whole claim process for its curated products to ensure that access to these services through our institutional partners is easy and friction less.
Life insurance penetration in India has room for growth. What are the main hurdles that Finhaat has encountered when it comes to encouraging wider adoption of life insurance, and what strategies are being implemented to overcome these challenges?
Insurance as a product has a very low penetration in the target segment that we are working with. All our plans and strategies are driven towards helping increase the awareness about insurance and the Finhaat platform is built keeping in mind the challenges that we have faced.
How Finhaat is playing a vital role in helping the emerging middle-class and lower-income segments? What are the challenges Finhaat is facing and how are they planning to solve that?
Distribution of financial products and specifically insurance has 3 key challenges, Products built for urban area are generally pushed into rural with price point & benefit reduction, Lack of post-sales support, Lack of trusted one stop solution for Rural population.
Finhaat targets to solve for all these problems through:
· Its curated product platform that is built to cater to very specific needs of the target segment
· Digitise the sales and post sales support to ensure that we are able to provide a paper less journey through the product life cycle
· Distribution through tie up with institutions that have presence in these areas and providing right product and digital platform to ensure that we are able to provide assistance at each level of product journey
What are the future plans of Finhaat?
Presently Finhaat caters to more than 40 Institutions covering more than 15 lacs lives across 60 per cent of the PIN codes of India through our products in FY23.
In FY24, Finhaat key focus area for growth will mainly be three fold:
Focus on increasing the Curated product suite through right product building,
Increase penetration through multiple partner tie ups and enabling our partners to offer right product and experience to their client and reach out to more than 35lacs lives in FY24.
How is Finhaat different from its competitors?
We work in the financial services distribution space in the underserved semi urban and rural population segment. There are organisations overlapping with our work, however, most of the competitors are working in urban space or tier-1/2 cities whereas Finhaat is working predominantly in tier 3/4 cities & rural areas. Besides, one of the capabilities Finhaat poses is tech enabled service platform especially for claims.