About: Anand Pejawar is an industry veteran with over 37 years of professional experience with BFSI Industry. His major experience ranges for about 19 years in Life Insurance and 14 years with the Banking Industry. He has been instrumental in setting up the most productive integrated model of Bank Insurance and Micro Insurance in SBI Life Insurance which is today considered as a trendsetter in the sector. He has also represented Life Insurance sector in various committees formed by Government of India as well as by IRDI and RBI from time to time. He is currently handling the entire Operations, Information Technology, and International Business for SBI Life Insurance Company Limited. As far as his other credentials are concerned, he has also completed MDP programs from IIM Kolkata, ISB Hyderabad and is also the alumni of Columbia Business School, Manhattan, New York.
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AITD: Today’s topic is Embracing Digital Transformation. Now, digital transformation is an important step in any company's goal. The goal of digital transformation is to apply the right equipment, tools, and knowledge to make businesses function better and ultimately be more profitable, and if done right, going digital can improve efficiency, it can reduce cost, increase agility, enhance the customer experience, and offer new insights into business. This can also help businesses to improve their product or service offerings while also building a more meaningful relationship with the new generation of customers. As per a recent study, it was found that digital first companies are 64 percent more likely to achieve their business goals than their peers; while digital technology is revolutionizing the world, it has become imperative for organisations to embrace change and evolve.
So, my first question is based on this context is primarily a digital information transformation is accelerated in the Indian context and it has gained a lot of acceleration which is supposed to be there in the next couple of years.
Now where is your organisation in the digital transformation journey? What is the vision of SBI Life and what desired future state it wants to achieve, how is SBI Life communicating the vision objectives to the employees making seamless for everyone to embrace the change?
Mr. Anand Pejawar: First of all, thanks for inviting me to this studio for a talk. My greetings to all the people who have joined on this link and I hope and pray that all of you are safe and sound in these difficult times of the pandemic.
Coming to today's question of digital transformation journey especially for my Company which I represent, which is SBI Life Insurance Company Limited. SBI Life Insurance started operations way back in 2001 so typically we have completed 20 years of operation in the Country in the private sector life insurance business. We are into the business of life insurance. We started as a subsidy of SBI and BNP Paribas Cardif. SBI was holding 74% stake and BNP Paribas was holding 26% stake. That's the way how the Company started and in 2017, the Company went public, and we are today a listed Company as far as the status of the Company is concerned and SBI still holds a majority stake in the Organisation.
We have a lot of foreign institutional investors who have been our equity holders from time to time. Now, coming to your question about the journey of digital transformation with SBI Life. In SBI Life we understood the terminology digital transformation quite early and way back in 2017; to be precise we looked at how we could transform the various processes and systems of the company using latest digital technology. Now one thing what we found at that point of time was lot of people thought that digital means just converting the existing processes that you have into a digital format and that they said we are digital.
While I think if you have to really go digital it's the complete relook of your systems and processes; how you can better them, how you can improve the user experience and when I say user experience the various stakeholders that are there for the organisation typically for a life insurance Company; we have four major stakeholders, but customer obviously is the king so he is the centre of everything but then you have distributors as you all know in India still life insurance Company is distributed face to face to a large extent and I will come to you why I say to a large extent, so you have the distributors then you have the employees because they after all are the ones who run the organisation and deliver the service that is required and last but not the least the regulator.
So, when we look at digital transformation, we typically look at all these four stakeholders that are there and based on this, the vision of SBI Life of on the digital transformation is, how can SBI Life be the preferred life insurance for the people of India?
As I said, we are a subsidy of SBI. SBI is a banker to every Indian; so, naturally, the corollary goes that, can SBI Life be an Insurer to every Indian; can we offer insurance policies to every person in India who's there and that's how we have looked at the digital journey starting from 2017?
Now, the question is how does SBI Life communicate the vision, objectives; the very simple thing is that this whole thing started from the thought process as I just explained to you why we wanted to move into digital transformation. State Bank of India, who was a primary distributor of insurance for us; almost 65 to 68 percent of the business is generated from State Bank of India and associate banks now, which are merged into State Bank of India and also the rural regional rural banks sponsored by SBI.
So, we have 17 of them, so totally about 24,700 branches plus 7500 of the RRBs which are there. That's the entire distribution map only of bank assurance channel if I look at it.
And the second, is the Tied Agency; we also have one of the most productive Tied Agency in the private sector life insurance companies; almost about lakh and sixty thousand distributors of life insurance who are tied agents with us. And if we have to look at this mass and how do we bring them through digital medium in an ecosystem that can help sourcing of the business, processing of the sourced business, issuing the business and most importantly servicing of the business.
So, these are the four steps that probably we looked at, concentrated in the digital transformation that we looked at. Now, how did we go about doing this change? I think, today, I don't say this but there are a lot of studies which have happened including Limra which is the Life Insurance Management Research Association of USA who came down and did a study in our office and SBI life in 2017, set some unique concept called Digilab.
Digilab is nothing but a digital laboratory where SBI Life runs a particular process, and the process is something what we called as ETPR. ‘E’ for ‘Evaluation’ of the technology so any technology which comes and which we see may be used in insurance, not used in insurance, used in some other field we try and evaluate this technology in the Digilab and it's an in-house in-built Digilab, it's not an outsourced one. So, we evaluate the technology with us and find out whether this technology can help the life insurance business that we are into and help us in some way to either reduce the TAT, improve services, give a much better user experience, have cost effectiveness so there are about five to six parameters that we look at whether this technology satisfies those things. If it happens then we move to the next stage which is the testing stage.
‘T’ is for ‘Testing’. Here we have a small team which works on this technology and sees where it can be used, which function, whether it is front and sales whether it is mid-office, whether it is back office, whether it is servicing, where this technology can be made use of. We have an IT champion; we have a business champion and then we create a small prototype.
Next, ‘P’ stands for ‘Prototype’. So, we create a small prototype to see how it works and what kind of result do we get out of this and once we are satisfied that this prototype gives us the desired results that we are looking out for what we had in mind before evaluating this particular technology then we do a rollout throughout the company.
So, this is the ETPR Methodology of Digilab that we have introduced in 2017 and friends I am very happy to say that as on date, almost 17 technologies have been rolled out in the organisation and another similar number are on an evaluation testing prototype stage where we are likely to roll it out very soon, very happy that this is something which the organisation gave us a free hand to do it, we could get the collaborative effort of all the people involved IT, Operations and all the teams which are working into it and bring it. So, what we have done in digital transformation is a complete collaborative effort in the Digilab that is bringing up the entire change which is today probably a lot of people are telling us that SBI Life stands at the forefront of digital transformation as far as life insurance business is concerned.
AITD: The concept, which you said ETPR, I would say is a very, very interesting concept which is there and as you said it started from 2017. So SBI has always been a leader and the humongous amount of people lives you are touching in terms of rural, in terms of semi-urban and urban areas is absolutely very large and from that perspective if you can drive this technology in such a fashion is really commendable and that's why SBI has been the leader in this.
Now, in today's network based digital organisations are managed and structured uniquely than conventional businesses as you are talking about that you have a system where you evaluate, you test, so what is the right approach and mindset of top management to design manage and grow a digitally driven business to some extent you have explained me something but I would like to know more than what is the mindset of the top management in dealing with ‘being a leader’ and how do you take it forward? What is the road map of this digital transformation?
Mr. Anand Pejawar: When we started in 2017, we never thought we would be leaders or we want to be number one, that was never the vision. When we started in 2017, the focus was on how can I improve the customer experience? Life insurance is the only product I think which is with any person who has brought it and if he has bought the right product in the right manner, I think, this is one of the financial products which is for the longest tenure.
Even I think fixed deposits are available only up to 10 years. Here you have life insurance policies ranging from 20 to 25 years, some of them issue whole life policies. So, we went one step backward. How do I create that customer satisfaction and that satisfaction leading to customer delight and that took such a long period? Holding on to customers’ likes or dislikes, holding on to the customer's viewpoint for such a long period itself is a big, big challenge and that's where we found that let's try and see how we can work.
As rightly said by you, most of the organisations which are there have typical silos which have created over a period of time, which are these traditional structures. I am not saying they are right or wrong; just understand, when I am saying these things, but these are which are there right from beginning so every big organisation has an IT department which is there to put the IT as major function but what we did here is instead of carving out, instead of creating a separate digital vertical and then putting it against or either parallel to IT department, what we did as the first thought at the top management was that we created a technology and innovation vertical within IT.
Because whatever we may do in digital, it finally has to integrate with my main systems, the main IP systems which are there. So, the people working on digital must have a clear vision, clear idea of what is available on the main systems which are there on which the company runs; for example, in an insurance company it is the policy management system which is the heart of the entire organisation, now if I have to do huge amount of digital transformation I cannot go and change the main system or the core system which is there, which we call it as PMS ‘Policy Management System’, so I need to create the digital transformation on the periphery of this particular thing.
So, first and foremost when we looked at digital transformation, why is digital transformation required, is it because everybody else is doing it we should do it or is there some logic, some view, some thinking on the digital transformation that is required, and that was a very-very important thing that we took up in the beginning? We wanted to completely change the customer experience by bringing in the huge technological innovations that are available in the universe. How can that be done? There are various methods of doing it; the most commonly used method is Agile approach.
Yes, I absolutely agree with Agile, we came up with something called ‘Phoenix Agile’ approach of going ahead, what is ‘Phoenix Agile’, we first identified the pain points which we felt are there in the organisation as far as digital transformation skills. How do we look at these pain points and how do we come out with quick logical scalable Agile kind of solutions to these pain points?
For example, all of you know that Worldwide, when there is a study done on why people don't buy life insurance on their own, one of the big things that we found was that the buying process is very, very cumbersome. You need to fill up a 12, 14, 16-page proposal form attach so many documents along with it, do so many things with it, it's too cumbersome. I would probably do 10 things more than buying a life insurance. So, if I look at it from a customer side, how can this digital transformation change the entire buying methodology of the customer? How can it make it simpler; how can it make it more Agile while there are so many things available in the financial ecosystem of that person? Can these things be easily integrated with the permission of the customer and make this entire journey which the customer felt was cumbersome into a very simple process on a digital platform?
That was the thought process which became the second thought process. As I said, there are 24,700 branches of SBI associate banks when it got merged with another 7000 branches of the Regional Rural Banks if physical forms had to move in from these locations and SBI as you all know my dear friends have got branches in Leh, Ladakh. I have got branches in Kanyakumari; branches have grown in Baruch and Kutch right up to Orissa on the other side. So, wherever you go in fact there is a joke almost 13 years I was in Marketing and Sale so when I used to go and market this thing, the people used to joke around that a place might not have a post office but there will definitely be a branch of State Bank.
So, if those branches are supposed to generate business and send it to our offices, this required manual movement of these documents obviously when there is a manual movement a lot of dislocation, a lot of things happening, documents getting lost in transit and all this. So, this was the second way how do I create a platform where I get rid of this paperwork and then still make the life simpler for everything, so this is exactly what I meant by ‘Phoenix Agile’?
AITD: So, a very, very interesting thought shared by you and couple of things which I will touch upon in our later discussion is one which you talked about that the very basis of going into digital transformation is not that everybody is doing it, but it is more of a change in customer experience.
Mr. Anand Pejawar: No, I mean, there was a purpose and what was the purpose? Purpose was customer satisfaction, ease of operations and how do you make life simpler for all stakeholders not just the customer the distributor the employees the regulator and still give a better experience to the end user, which is the customer, so that was the whole purpose.
AITD: Why I was touching upon customer experiences is in digital world is the most critical and most important aspect and that’s the reason why Amazon and all these people they have come to our houses because of that digital experience. So, I will touch upon these aspects and these are very critical aspects, and we will talk more about customer experience and one interesting thing which you said is that the buying process was very, very cumbersome and number of papers I remember when you sign a document there are 20, 30, 40 pages and you just sign you don't read them, and I always say that if you ever read the entire terms and conditions one will not buy.
So, how to make it digital is very interesting, given the size my only wonder is that the size of SBI is such huge that how it is done is something which is very, very interesting to know and that's what we touched upon also about ‘Phoenix Agile’, so we will also talk about agility in the next questions. Now as you were talking about the basic things about digital transformation, now any level of digital transformation will unsurprisingly disrupt business processes and models to survive and stay competitive in the modern digital era.
So, I just wanted to know, because as you said the buying process is so cumbersome; there is a distribution channel which is very huge, so, all these are existing conventional processes digitalizing them into digital transformation is a very big challenge and so what is your viewpoint on this how does SBI Life manages this?
Mr. Anand Pejawar: Digital transformation will always, and I will emphasize on the word ‘always’ disrupt everything whether you like it or not. So, the first thing, I think any organisation when they look at digital transformation is, this is going to completely disrupt my normal way of functioning, that should be the basic underlining principle; otherwise, there is no sensing getting into digital transformation. If I want to just transform my existing physical formats into a digital format, I don't consider that as digitization.
Now digital transformation according to me is the disruption of the process starts from the disruption of the existing thought process, everyone in an organisation is used to a particular pattern of working, in digital transformation, this gets disrupted first. So, mentally, the employees must be told to practice that every digital transformation is going to be disruptive and it is going to disrupt the way how we are working today. So, first point I think what we took into consideration was disruption of the thought process itself. I was doing a particular processing of a particular file in this manner now it's completely changed I need to reskill myself to get the whole thing done and that itself becomes a resistance from the employees.
So, along with the thought process, I think, making the staff or the stakeholders understand the importance of digital transformation and the benefits that it will give to them is a very, very important. Anyways, this process SBI Life did in a very, very systematic manner throughout the Company. So, the sales guys manage the sales part of it, the operations guys manage the operations part of it, the back-end people started looking at the back-end digital transformation part of it. The second disruption which happens is the process disruption and this again is very, very important.
Now, the basic idea of digital transformation is that the process should be faster; there are some legacy processes which are there which takes a lot of time, a lot of duplication, so when we do a digital transformation, we look at it end to end and see what can be knocked off, how the process can be fastened if required shortened but still giving a better experience to the end user.
The third and the most important disruption according to me is the system disruption. As I said, today all Companies are computerized; every organisation however big or small is completely computerized now when you go for digital transformation the system changes, the entire ecosystem in the office changes how you are processing a particular life insurance proposal at the beginning of the digital transformation how we are doing it now it's completely different. I will give you a small example about digital transformation in SBI Life and how it actually changed the mindset of the people. Transforming from this big, long proposal form and going and so many information coming and then earlier we used to ask for salary certificates income through KYC certificate, whole lot of documents and in India, a complex Country you know that everybody can't give every document so that's also a fact of life.
So, in a digital transformation how do we make the whole process simpler, so we first came out with the platform to source proposals that was the first, because finally the acceptance of this digital transformation to happen from the front which is the sales guy who's bringing business for me. Today he used to go with the bag containing proposal box and different proposal forms for different kinds of policies and all that stuff so ULIP you have a different form, your term you have a different form, endowment you have a different form, so you used to also get worried about how many forms do I carry and what do I do. So, what we first did was we created something called mobile connect; so, today entire sourcing of the business happens on a mobile application of a distributor. Now look at it the very thought that the 12-page form has been converted into an application which is used on a mobile, that thought process is completely different.
Secondly, distributors are of different categories; you have tied agents who are distributors, in certain official areas you have 12 standard passes who are distributors may not be knowing how to use this technology in a more effective manner. In India in certain places, we still have 2G, 3G working on so we had a big challenge on how to get into the M-Connect that is there, but I am very happy to tell you that today the entire 99.98 percent and I am not exaggerating is sourced on this M-Connect application. So, whether it's a Regional Rural Bank or whether it is SBI or whether it is any other partner bank or my tied agents, all these people are sourcing policies through this mobile application.
Last financial year, which is 2021, as of March 21 we could manage more than 20 lakh proposals on this mobile application and we have gone to such an extent by getting digital transformation that today for certain category of customers, I can issue paperless, pen-less policy. Some of them might not believe some of them might laugh but I can tell you that this is possible because without this M-Connect platform that we had we went and got connected to the financial ecosystem with the permission of the proposal hold up. So, we connected this platform through NSDL for PAN verification; UID now for the Aadhar verification then various credit bureaus getting their credit scores then we went even to IIBI which is Insurance Information Bureau of India which is a repository of the entire insurance policies which are active and there we got that API integration done and today if the person has got information available on these platforms we don't ask for any paper, we neither ask for KYC paper we neither ask for Aadhar number or your financial documents or anything. We have data which flows in on real-time basis in our system and gets done. So just imagine 20 lakh proposal forms coming from all over India in physical format collection is the problem, scanning is a problem, data entry is a problem, processing is a problem, storing is an issue. Today the whole thing has been reduced in a digital format.
AITD: Even if you scan it the file size is so heavy transmitting that data also takes a lot of time.
Mr. Anand Pejawar: There are technologies available today which can compress it up to ninety percent; those are good technologies. I will be using a lot of those technologies. Now, the second, is as I said we had distributors in northeast. I have got distributors in Nagaland, Aizawl, Assam, Arunachal Pradesh, Sikkim way down in Kanyakumari in Bharuch and Kutch and here on this side till Bhubaneswar and Orissa and Keonjhar. Just imagine, even if I tell you the names of the kind of population which is there, the kind of people who sell policies there, how do we get the entire information at the same time what is the process where I can enable a sales guy to be up to date in whatever information is required to do a very correct sale that is very important in life insurance, as I said this is one of the longest financial product that is available in the market.
So, we created something called smart advisor pool application for the distributor. Again, this is in-house in my Digilab itself no external agency being brought in to develop this. Our own people SBI Life people have developed this in the Digilab, and today entire processing happens on these two applications which are there, and we have put all the required infrastructure security features in place, so, no information of the customer can be stored on the mobile application after it is being fed in it automatically gets deleted and moves into my system. The distributor can in no way can retrieve that data or misuse it. We have MDMs and DLPs which is Mobile Management Systems in place. We have DLPs that is Data Loss Prevention Systems in place, so every possible info security systems have been put in place to ensure that this digital transformation does not allow leakage of data outside the ecosystem and this is all with the approval of the customer. So, today the customer is very happy this year as of March 21 we are the largest company in terms of number of policies issued for last so many years, but we have already exceeded 16.5 lakh active policies which have been issued only in this year of pandemic. It puts SBI Life at the number one position as far as numbers of policies are concerned. So, this is the digital transformation and the thought process that I wanted to share with all of you.
AITD: My next question is rather interesting. I would say although as you were talking about the disruption part that how it used to happen 20 Lakh policies and so much of documents now although most insurance customers in India still prefer to purchase from an intermediary wise like an agent, bank, or broker. The evolution of digital sales and service offering is changing the ecosystem of the industry. With the emergence of new technologies insurance sector which is Robo Advisors we have heard of data powered systems and much more.
So, how do you see these technologies changing the ecosystem you have touched upon some part of it like your Digilab had come out with some products which the distributors are using but traditionally when we talk about it, these are being sold, with this person is known to me, he comes in and all my marriages on my family functions that's how traditionally the life insurance was sold and moving on to completely a digital new ecosystem where the customer himself experiences the various aspects, this transition is very, very huge.
So, how this transition is happening with RoboCops we have heard these terms as you were mentioning is that this is happening 12-page document is compressed to a small file in the mobile system? So how these distributors are coping with it how they are being trained how they are taking this from traditional to more digital means of business?
Mr. Anand Pejawar: See, whatever digital assets a Company may introduce, I think, one thing all of us will agree that if the digital assets are not adopted and adopted in the right manner, in the right usage, it's useless. Now, if I look at the sourcing application or the smart advisor, which is an enabler for a sales guy to do the sales, how do I make him use that application? So, what we did was when we created this testing module and the prototype in the Digilab, we actually collected some very good sales people from the bank and from our Tied agency. A group of people from various locations, not only from Bombay, we had some people from all over the place because we needed to also get the right feedback before we rolled it out on a PAN India basis because once you roll it out on a PAN India basis, it's difficult to control certain things.
So, we took all the people from PAN India and then we gave them this application and said, please use this application and tell us what it is, you are the champions or the ambassadors of this application. So, look at it first of all we tell them that you are the chosen few to experiment this application you are an ambassador and then you look at it and come back to us with your feedback, if it's a good feedback we will definitely incorporate this in the application. Let me tell you, this played the entire game changer for the Company to use of the distributors. The news spread that this people are being chosen to do that, so people started asking why we are not given, we also want to use create that pull factor because, in life insurance, we are always told that it's a push product nobody goes, and I say I want life insurance. At least in my experience of banking in India overseas wherever I have worked I have never seen anybody going and saying, take my cheque, say of ten thousand rupees I need a life insurance. The agent has to catch the guys at every possible place and that's one of the reasons you spoke about marriages, life insurance agents are never invited for marriages.
So, coming back to the point is how do you create that pull factor for adoption of this particular technology. Now, once these small groups of people started giving feedback, we started incorporating the good ones acknowledging the fact that you have given a very good thing, and this has been incorporated the moment we said that, and we released it we found the usage going up because more and more people started using this application. Then we started loading it with more and more features today the smart advisor application that we have developed is like an SBI Life office in a pocket of a distributor.
Whatever he wants information about the product, about the process, about the policies, about the proposal, which stage it is, what has happened, renewals not coming, every possible information is available real-time to the distributor. To such an extent when we went and changed my CRM next, the CRM module which we had, we went and changed and introduced a new one, we connected the CRM next with smart advisor, so if you are a customer and you call up my call-centre, the talk between you and the call-centre executive gets noted on CRM and that can be seen by my sales executive.
So, if your sales guy is coming to meet you for some work just before starting from home to meet you, he just has to look at it what was the last conversation Mr Ashish Sahu had with my call-centre and what was the commitment given to him, that is available absolute on time online. So, this completely changed the mindset of the user it started using more and more so we could monitor, who is using what is the performance level, where is it dropping, why is it dropping so we also at the back end from the IT side went on improving the infrastructure, improving the back-end support and all that stuff. So, to such an extent where today my advisers whether they are bank employees whether they are Tied agents, Corporate agents, whoever they are, they don't have to even keep their customers phone number in mind, he just has to go and check the renewal status and if the policy is renewed, he has got a small icon of a phone he just clicks that icon and he gets directly connected to his customer, he wants to send some information on his email, there is an email icon he just clicks the email opens up email gets directly connected right you. If the customer has given an option for a WhatsApp communication, because that is mandatory that we get the consent of the customer so that consent gets noted and it is seen on this smart advisor he can also send the communication on WhatsApp.
So, whatever greatest developments happening in the ecosystem, we try and bring it up in the smart advisors so today I am sure every advisor before he leaves his house, will look at the smart advisor application to such an extent that if today he is coming to your area to meet you we have given him GSP system location where he can be told how many other customers of his are in that vicinity of two kilometres in case if he wants to meet. So, the moment you enable your guys to use this to make them rely on this more and more, give the right information, I think, the usage goes up drastically and this is something what I think is the magic of adoption, adoption, and adoption. This is the only mantra I would say and the top management driving this entire digital transformation is the only magic that can happen in the system, without this I doubt whether any organisation can claim success in digital transformation. There are huge resistances in the beginning but once you make them understand how it is going to benefit them rather than the organisation, the usage goes up fantastically well that that's my experience in SBI.
AITD: So, adoption is one way you had managed the distributors, identifying the best salespeople, and creating some kind of a competitive synergy among them. As, you said that some people said why we are not involved in this so that is something which actually as you rightly said it's a push market where you have to push the product. So, in this scenario getting involved with distributors is something I think that may be the biggest booster in success of probably SBI Life.
Mr. Anand Pejawar: I will just add, I think, the main success of SBI Life in this is, I think, understanding what the requirement of the environment is. We don't develop applications because we want to develop and throw it out in the ecosystem, no, for example as I said if your policy is for 20 years, how do I ensure that you are engaged with SBI life for 20 years. 99 percent of the customers in life insurance have got a big problem if you people don't come to us for renewal, you only contact us during renewal time. Now, how do we ensure that SBI Life is on top of mind of this customer. So, we came out with an application called Smart Care. Right from the time you signed the proposal form, not even your policy is issued I am going one step backward from the time you have signed the proposal form you are asked to download this application on your mobile and register on your registered mobile so what happens is I also look at the security features which I am providing to the customer, I am getting his mobile registered I am sending an OTP on the registered mobile he enters that and then he downloads the Smart Care Application. Now, Smart Care will be with him till the policy matures or the death claim is paid to the customer.
Just imagine, 15 years, 20 years, 25 years whole life and today I have created with the help of IT digital operations team an entire ecosystem around the customer to keep him engaged. He can track his proposal. The proposal has gone to the underwriter, underwriter has accepted it, it has been issued, it has gone to my e-repository, so no physical policy to be delivered; it gets into demat format but there is a soft copy available on this Smart Care then at every month we keep on, if he is a unique policy, we keep on giving him the fund information. So whole lot of customer engagement program developed around this application, so the customer keeps on looking at this application at regular basis he is prompted to use that, he is prompted to open up and see what is happening like for example you have the credit policy been declared by Reserve Bank of India small snippets are sent the budget. They are declared snippets that are then sent all these things which are more of a personalized nature in getting created in the system and that makes the customer addicted to this particular app. Today all of us are working on apps, nobody works on big desktops and all that everybody is working, whether it's a banking app, whether it's an insurance app, whether it's a mutual fund app including manage matrimonial apps.
AITD: In fact, I got a hang of how SBI understands the pulse of the situation and acts accordingly. In fact, my next question was about the customer preference which you have already given me the perspective of Smart Care Application which actually takes care of the customer. Why I am saying this is what you said is that you understand the pulse of the people and accordingly drive the digital transformation.
What is the emerging trend in customer preference in life insurance industry in India?
Because there has been a paradigm shift in consumer perspective it is said that now it is no longer product but the experience which consumers are looking for and that is what you have been telling us about the Smart Care product. The moment the customer signs up the policy they get so much of involvement and it is no longer left to that the customer come to you only when it is going to be renewed. You are engaging the customer right from there and that is what actually it signifies the word ‘customer care’ in the true sense actually.
Mr. Anand Pejawar: I was only saying our bigger challenge earlier was how do you bring all the constituents of the stakeholders to participate in this. One thing which you found very interesting, and I think SBI Life has got a fantastic team of employees whenever you want to bring out an app, you always call for names from all the employees and the kind of response we get is fantastic. We have a difficult time choosing, which one to choose and why but you will be surprised the way these people think about the names, even Smart Care. Why was Smart Care named as smart, why was smart advisor named smart advices, and this was given by employees when we called for these names and said okay, we have come out with an app and we would like to name it, would you like to suggest a good name for it.
So, as I said, a collaborative effort on every front. So, somebody is given a name he is waiting that whose name is going to get into this app and then he's going to try and see what it is. So how do we do it all the levels at the employee level; right at the lowest level obviously there is a push from the top, there is a push from the board, from the MD, CEO, and the people below it but yes, we take the entire mass of employees and the distributors who are there to get this digital transformation and that is the true sense of the adoption that is done. Which you had in mind I think that is the real sense of digital transformation otherwise it is only digital asset which I also have need to not in the other sense of need to o but yes, I also have a digital asset in place, but it is there in the shelf nobody is using it.
Here is a case where you have come out with difficult transformer assets you have done digital transformation you have changed the entire process of how policies are issued. So, it is not just one small application which takes care of it and that is where the Digilab comes in play. Vendors will come and tell you I have developed this particular product for you which will take care of this but what before and after while in Digilab when we look at these applications or we look at it as an entire process end-to-end process of how things are to be managed if this thing has to go live that I think is crucial for our digital transformation journey of SBI Life.
AITD: Most of the insurance players have already started using emerging technologies and innovating around like policy issuance, claim management and underwriting processes through digital technologies like telematics, a blockchain, machine learning and cognitive computing. How are these tools going to help the insurer in providing a hyper personalized customer experience given the fact that AI plays a very important role?
So, what are the key technology and labourers for SBI Life?
Mr. Anand Pejawar: In the last almost four to five years, let me confess I think the technical advancement that has happened overall, has been fantastic, has been absolutely fantastic you may call it, or you may give it whatever name you want. You may give it machine learning, artificial intelligence, robotics, or any name that you call it. I look at it as to how can you as an organisation make use of this technology which is available to you to improve various functions of an organisation. Now typically in a life insurance Company, my function starts from acceptance of risk, which is my underwriting process, the proposal has been synced-in into my system through M-Connect it comes into my system now for an underwriter who is doing it; how can I give him the resources through various technological tools to make his life simple, keep in mind it's a paperless, pen-less transaction so there are no papers floating around.
So, then we make use of analytics, analytics is used in a very, very big way in all the insurance companies today and it is used in almost every aspect of insurance operation; so, whether you look at new business whether you look at underwriting whether he's a high-risk customer, a feminist customer, a low-risk customer; all this bifurcation is happening based on analytical models which are inputted in the system which is there. Go one step forward. Renewal. Renewal is a very, very important parameter for a life insurance Company that tells you how good your quality of sales is, how good your customer base is and that actually helps the life insurance company to build the embedded value of the organisation.
So, the more renewals I correct, the better value for my organisation. Now, here there are analytical models which tell me whether this guy is going to pay me on time, likely to pay me on time or likely to delay or may default. Earlier, every insurance company used to do ‘carpet bombing’ of the entire population by calling them. So even if you are a person who is very dedicated principled perfect on due date you ensure that the renewals are paid you would still get a call “Sir, your renewal is in your own hand” and then it bugs you. With help of analytics you can completely redesign this strategy for renewal management and companies are doing it SBI Life is doing it in a very big way since 2017 and that has actually helped us to increase our consistency.
In fact, just to give you a small example, which, my board meeting which happened has also declared to the entire country in the five-year 61st month persistency that means the person who has bought policies five years back is still paying on my renewals. We are the highest in the private sector industry. So, with a large case of policies if we can manage that it is only and only because of analytics that it is possible.
Analytics is today giving us the right information of whom to contact, when to contact, why to contact and how to get that contact done. Analytics also tells me whether this particular person views his email after seven o'clock at night or very early in the morning at seven o'clock in the morning, it tells me whether he likes to be contacted on mail or on phone or WhatsApp or whatever. So, now whole lot of analytical models which are running right through into renewals into wealth management are very, very important function for a life insurance Company. Even there we are using the analytical models in a big way we make use of machine learning. We make use of artificial intelligence in a big way.
Robotics is going to take a big size in the coming years. It has already started companies like us have already rolled out processes under robotics and this is again going to be a game changer on the operation side. It is going to completely redefine the system, redefine the way things are done, 24x7 error-free. Everything possible that you thought of and can be made of by robotic applications which are in place. The last one which has still not entered the Indian life insurance industry is blockchain technology. Fortunately, about 14 companies came together in 2017 and we have done through proof of concepts on blockchain technology, very good proof of concepts of blockchain technology and those have been very, very successful. Let me tell you that the only question is how to take it and launch it and actually actualize the blockchain technology in the Country but yes blockchain technology is going to open up completely new vistas for digital processing in the Country and that is something which is, and I am personally looking very much interested. I am very much interested into blockchain and how this can completely turn. We have done a lot of work on blockchain but still a lot of organisations externally who need to come in and join hands and then work it out, so we are all in that, all the fellow life insurers are in the same thing of how to come together and get you done but this is something.
AITD: I just want to ask you something which is very, very close to us because we are into learning and development field.
So, how do you think live insurance companies can prioritize upskilling and re-skilling employees and develop operating models capable of responding to changing demands as you said it's ever changing, it is very dynamic and position themselves in forefront of future proofing their workforces with so much technology?
Mr. Anand Pejawar: Very good question which you have asked and especially in today's pandemic scenario, I think this carries a lot of weight. What we found is that in life insurance everything depends on trading. The more you train your sales guys, the more you train your operations guys, the more you train your people the better output you get, the better things happen. When the entire thing is under lockdown, how do you train people?
Training was always face-to-face. Huge organisations have created huge infrastructure for training. Today those infrastructures can't be used because of the protocols that one has to follow. So, SBI life came out with a fantastic digital method called e-Shikha; so, today we have a digital platform for our sales guys, for our operations guys, for our other than non-sales of operations people employees who can get trained on the e-Shikha module so whether it is pertaining to sales, pertaining to new products, pertaining to new technologies, new developments whatever you would like to decimate in your employees or your sales force this becomes a wonderful tool to such an extent where we have created small videos on particular subjects not actually in 20 minutes because generally your capacity to listen to more than 20 minutes.
Small-small snippets, small-small capsules on different topics of interest so it could be a small capsule on underwriting how do you underwrite your term plan, how do you underwrite a ULIP plan and how do you underwrite a traditional plan, how do you service, how do you change nomination, how do you change your mode, how do you address these small-small things which are required? You create small capsules, push it through the digital mode; the person when he is traveling or even at home, he just clicks it looks at it listens to it there's a visual there is an animation which is given he understands it very well.
He can keep on calling it back and re-looking at it and understanding it again and again if he wants to do that which was not the case earlier when face to face used to happen, but e-Shiksha or e-learning is something which is definitely going to help. It is going to ring fence the entire population. Not only that there is a study in US which was done earlier they used to say people used to leave organisations because of bosses, now they don't leave because of bosses; some people who have left you are ready to come back and join you if you have joined another organisation they want to be trained, they want to be skilled, they want knowledge enrichment to happen, they want skill enrichment to happen and all of this is today being done through digital methods.
AITD: I will take up one question which has come from the audience and quickly we'll take this take up. This question which says that a well-developed insurance sector acts as a backbone of the nation as it supports the citizens even in unforeseen events if not only help consumers by providing financial protection but also contributes to the nation's economy.
What has been the impact of COVID-19 in life insurance sector in India?
Mr. Anand Pejawar: COVID has had an impact on the life insurance business, let me tell you that. I would like to reply to this question in two ways as far as the business of life insurance is cut concerned it's definitely impacted. Impacted because companies were looking at high growth, high things now that has somewhere got nullified to a certain extent but fine no problem, we also understand how the economy is and how it works and what happens. I think the bigger contribution what life insurance company has done to the economy is supporting the equity markets. So, all the money which has come into the ULIP funds of the life insurance Companies have been very well invested in the equity markets thereby giving the people the live policyholders very good returns.
So, if you look at the returns which some of the ULIP products have bought; they are extremely good and much more than what probably people expected to get. That's on the returns part of it. Some of them who have put into that market obviously that will depend upon what is the economy of the country, how much is the interest rate, whether our RBI reduces it, increases it, that has got a direct correlation to all that. The most important thing what has happened in the Corona period, the COVID period is that every organisation is doing huge amounts of work and I am stressing on the word huge. I am not saying that it is something which is great; I am saying huge amount of work to support the Corona Warriors through these CSR programs that are implemented by every organisation and I am very happy that every organisation including SBI Life is doing a whole lot of work on the CSR to support the COVID measures that have been taken.
Earlier it was providing the PPE kits providing so many things to the Police Force, the BMC, the Doctors, all those people who are there and getting things done. Now all insurance companies are trying to see how we can support vaccination drive, which is very, very important if all of us get vaccinated the third wave has got nothing to fear about it. Let the third wave, fourth wave come you will be vaccinated, and people will still be in a position to continue with their lives and do it well, but the most important thing is how do you ensure the vaccination drive goes to the last mile and I think that is the area where most of the insurance Companies are working today regulator has also guided us on many things as to what we are supposed to do.
Wonderful guidance that has come from IRDAI and let me tell you every organisation in COVID has been doing it. Most importantly and this is something which I want to tell all the viewers, life insurance Companies have been paying COVID death claims at the fastest possible time. We have been paying it if all the documents are received on time even through a mail we need not even wait for our physical copy of the document. We have settled COVID claims in less than three working days and look at the amount of COVID deaths that have happened, we are sorry to say that money can't replace the person but at least it will allow the dependents to live a very decent life which the particular person or the life issuer had thought for his families.
So, one is on the on the equity support side, the other is on the death side, third is on CSR part that we are working on especially now in in phase two, yet we are putting a lot of efforts on the vaccination drive we are wanting to do a lot of camps where people get vaccinated. We are trying to spread the information of how the vaccination can be done, how the registration is to be done. Every insurance company is sending mailers, messages to their employees to the policyholders to the distributors asking them to get registered and get vaccinated and the last and not least is how every insurance company is trying its best to pay the COVID claims at the fastest possible pace. So, I think this is the way how life insurance companies are trying to do their little bit in this difficult time.
AITD: Absolutely fantastic to know that what SBI Life is doing for the nation as you talked about equity and vaccination and a whole lot of activities which you are doing and settling claims in within three days which is very, very critical at this point of time when people are losing their jobs. There are financial crises at homes.
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Moderated by: Ashish Sahu