August 2024 | 1752 words | 7-minute read
A shot from a blockbuster film directed by Rohit Shetty is underway. The plot sees Ranbir Kapoor dashing through over-the-top action sequences that land the star in the hospital. But, as he tells us, his trusted Tata AIG health insurance policy has him completely covered. The ad is part of Tata AIG’s latest ‘Expect the Expected’ campaign that highlights its core motto of delivering on its promises — “trusted name, complete claim.” Rather than using the usual tropes of fear, the ad addresses a key customer concern — ease of fulfilment of claims.
“In an industry where there is a trust deficit, we are using the Tata AIG brand to establish trust in the customer’s mind,” says Neelesh Garg, Chief Executive Officer and Managing Director, Tata AIG. Here, FY24’s fifth-largest private sector general insurance player, which has 5.2% share in the Indian market, does not disappoint, with a 96.7% (FY24) health insurance claim settlement ratio to its credit.
Market corner
India is currently the ninth-largest life insurance market and the 14th largest non-life insurance market globally and is expected to reach $200 billion by 2027. Despite the challenges, the non-life or general insurance industry ended FY24 with 13% growth and a premium of Rs 2.9 lakh crore.
A report by CareEdge Ratings estimates that the market will grow by 13-15% in the medium term. For Tata AIG, the outlook looks promising, given that it has doubled its business in seven years.
Tata AIG’s FY24 assets under management stand at Rs 26,854 crore. Over the last 10 years, its gross written premium (GWP) has increased from Rs 2,428 crore to Rs 15,423 crore in FY24, with a compounded annual growth rate (CAGR) of 20%, outperforming the 14% industry rate. Over the same period, while profit after tax (PAT) increased by 4.2X to Rs 685 crore, its net worth and investment book grew at a CAGR of 20% (Rs 4,677 crore) and 25% (Rs 26,854 crore) respectively.
“While we expect the industry to grow 13-15% over the next decade, we are strategising to grow by at least 23-25%. We aim to position ourselves as a leader, segment by segment. Motor is a segment where we will achieve the No 1 position soon, followed by commercial lines and health.”—Neelesh Garg, CEO and MD, Tata AIG
“Overall, our performance is driven by all geographies, channels and products,” says Mr Garg. Increasing customer awareness, a growing middle class with higher disposable incomes, and a favourable regulatory environment are all positive industry indicators. “While we expect the industry to grow 13-15% over the next decade, we are strategising to grow by at least 23-25%,” he says. “We aim to position ourselves as a leader, segment by segment. Motor is a segment where we will achieve the No 1 position soon, followed by commercial lines and health.”
This will be aided by the company’s strong distribution network. In the last few years, it has grown to 220+ locations, with 8,750+ employees, including 1,100+ full-time claim experts and 89,000+ licensed agents, and tie-ups with 6,500+ workshops, 10,000+ network hospitals, 11,000+ garages and 600+ broking channels.
Full throttle
“We have made maximum progress in the motor product line, tripling our market share from 3.2% in FY14 to around 9% to become the second largest player in the private sector,” says Mr Garg. “We aspire to be No 1 soon.” In FY24, Tata AIG’s motor insurance premium grew to Rs 7,437 crore, a 21.3% compounded growth from FY14. That bodes well as motor insurance, which comprises ~35% of non-life insurance, grew 10.5% over the same period. According to the Indian Ministry of Road Transport and Highways, of the 36 crore registered vehicles, 50% are uninsured. Sensing a headroom for growth, Tata AIG is collaborating with toll agencies and regulatory authorities to identify uninsured vehicles and bring them onboard.
The treads of commerce
Commercial insurance is another segment that has been performing well, with a GWP of Rs 3,984 crore in FY24. “We have increased our market share from 5.2% [FY14] to about 9%,” says Mr Garg. With this, Tata AIG’s rank improved to No 2 in the private sector. This growth has been aided by its comprehensive risk management framework, improved performance in marine cargo, refinery and trade credit segments, as well as its unique offerings.
“We are the only company in India that provides insurance for mergers and acquisitions,” says Mr Garg. “We bring certainty to the deal. We are also the only company that offers pollution legal liability insurance cover in India.”
In May 2024, Tata AIG launched two new products, surety insurance bonds for the booming infrastructure sector, and India’s first satellite in-orbit third-party liability insurance policy, as part of its strategy to target the needs of emerging sectors.
Investive care
“Although Tata AIG started off late in health insurance — about five years ago — we have grown at a CAGR of 23%, higher than the industry’s 18% in the same period,” says Mr Garg. He adds that while a major part of the growth in the industry can be attributed to group health, Tata AIG focuses on individual policies, which have a lower growth rate.
In FY24, Tata AIG’s market share in health insurance increased to 2.7% and it maintained its leadership in travel insurance. “Our overseas travel insurance performed very well, and Tata AIG has been a leader in this segment for the last 10 years,” says Mr Garg. “Our technology-driven approach has increased our market share from 21% in FY19 to 29% in FY24.” This growth has also been spurred on by its strategy of offering differentiated solutions. The company was the first to offer cover for consumables — now an industry-wide practice.
Tech-crafted solutions
The company is guided at its core by customer centricity — “One of the aspects we have institutionalised is the customer having a chair in every meeting,” says Mr Garg. Before any new product is launched, feedback from focused group discussions, customers, agents and sales team members is considered. “Our aim is to make the customer journey as seamless and convenient as possible, ensuring we reduce the number of iterations they have to undergo during the buying, claims or servicing process.”
Towards this goal, Tata AIG has enabled comprehensive cloud adoption across all verticals and made strong investments in technology. Through its Generative Artificial Intelligence (GenAI) Centre of Excellence, it is identifying relevant use cases, and building an in-house technical team to engineer all front-end solutions.
Leveraging its large rule engine library, the company is adopting machine learning for auto adjudication of claims and providing self-service platforms, like natural language processing-based chatbots and apps. “We use our data ecosystem to make the purchase journey much easier, providing customers with a single-window view of all information,” says Mr Garg.
“Our technology-driven approach has increased our market share from 21% in FY19 to 29% in FY24.”—Mr Garg
Tata AIG has adopted GenAI for improved customer service, like an AI-based sentiment analyser that groups emails into positive and negative experiences, with the service team resolving the negative ones on priority. It is experimenting with GenAI to provide personalised recommendations and solutions for customers based on their data, preferences and interactions.
It has also leveraged technology for product innovations, such as AI-guided self-inspection for faster policy issuance and drones to conduct surveys within three to four hours of a flood, so that on-account payments can be made the same day. Then there is its pay-as-you-drive car insurance, which uses a telematics-based application and device to calculate premiums based on kilometres covered. It helps car owners save on overall premium and is part of Tata AIG’s effort to make its products more intuitive and responsive to customer needs.
Streamlining business operations
To drive critical innovation in collaboration with business, Tata AIG set up an Innovation Lab in 2020. One of the first problems it addressed was the inability of engineers to conduct on-site risk inspections for underwriting commercial property risks during the pandemic. This led to the development of Netra, a mobile app and web platform for remote and digital risk inspections, transforming risk engineering services into a tech-based and data-driven process.
It has also developed a one-stop app for its agents to access any data, from training modules to customer testimonials, renewals and pay-outs, without having to visit a Tata AIG branch.
To equip its employees and partners with the skills required for the fast-changing landscape, it established the Tata AIG Academy in 2014. “We have successfully managed to combine new-age talent, ie people with digital skills, with people who possess age-old skills in underwriting and claims management, and created an environment for them to work in perfect harmony,” says Mr Garg.
Getting into top gear
“We keep experimenting to create long-term value for all our stakeholders. While insurance has traditionally been a way to get reimbursed for expenses, we endeavour to change that by taking care of your life in a slightly better way,” says Mr Garg. Tata AIG is experimenting with products that steer away from the ‘one size fits all’ approach. These include a telematic device, like a FASTag sticker, that gathers information to give customers a driving score and calculates their risk level.
Tata AIG has also entered the cybersecurity market. “One of the largest emerging risks is cyber risk,” says Mr Garg. “We have tied up with the world’s best cybersecurity consultants and partnered with customers to evaluate their cyber posture, in addition to underwriting with the objective of improving the quality of risk.”
“We will work very closely with state governments to ensure insurance penetration at the grassroots level to achieve the Insurance Regulatory and Development Authority of India’s vision of ‘Insurance for all by 2047’.”—Mr Garg
In the health insurance segment, Tata AIG is collaborating with Tata 1mg to introduce products that take care of OPD expenses. “With this collaboration, we are trying to create products that will appeal to a younger consumer base, so that they buy insurance as well,” says Mr Garg.
Expansion in rural India is another area of focus for the company. Only ~20% of the rural population has life insurance and Tata AIG is looking to grow by catering to their needs and aspirations. “Tata AIG is the nodal insurer for Maharashtra and Nagaland,” says Mr Garg. “We will work very closely with state governments to ensure insurance penetration at the grassroots level to achieve the Insurance Regulatory and Development Authority of India’s vision of ‘Insurance for all by 2047’.” For this, Tata AIG has partnered with India Post Payments Bank to provide doorstep access to products in semi-urban and rural India. It also plans to introduce small, ticket-size products that are easy to understand, service and claim, at the panchayat level, reducing the risk of mis-selling.
With its customer-centric approach, innovative products, and strategic expansion into untapped markets, Tata AIG is making its presence felt in the Indian market. Leveraging cutting-edge technology and a talented workforce, the company continues to break new ground and expand its horizons.
—Sharmistha Choudhury
