POSP + Digital for Insurance Sales
Banking Frontiers|July 2020
POSP + Digital for Insurance Sales
Lucknow-based regional rural bank Aryavart Bank has adopted frictionless customer experience to onboard customers for insurance policies. Shiv Bajrang Singh, chairman of the bank explains the salient aspects of this strategy:

Mehul Dani: What is the total income from third-party insurance product sale in 2019-20? What is the number of life, general and health insurance policies sold by the bank?

Shiv Bajrang Singh: Third-party insurance sector has always been a lucrative segment for banks. It not only ensures appropriate hedging of risks by insuring the assets but also contributes to the income through commission. The products are modeled based on the needs of the customers as well as the banks. The premium income of our bank has decreased to `274.14 million in 2019-20, from `359.34 million in the previous year. Also, our income through commission too came down to `44.24 million in the last FY from `53.84 million in the previous year.

The infographic shows that premium as well commissions during 2019-20 has plunged 23.71% and 17.82% respectively compared to the previous year. The insurance business is more pronounced normally during the months of February and March, but this year, this has been adversely impacted by unseasonal rains and hailstorms in February and COVID outbreak in March 2020, leading to negative growth in life and health insurance business.

How is the bank pushing insurance sales?

Growth in sales in insurance products is always linked to awareness of the products available, to bank employees and also to the targeted customer segments. One needs to have a thorough understanding of all the available options so as to pick the one that best suits the customer. For this, we have posted one marketing officer at each regional office and a specified person on a cluster basis. Specified persons, who are well trained and well versed to address the issues promptly in the branches, are delivering product knowledge to the customers and their family members. The sales results can be largely attributed to top-down guidance and control mechanism that is exercised by the department at the head office. Thorough monitoring of insurance sales figures and giving necessary guidance like changes in regulatory guidelines, training on new products, and a special focus on untapped areas, have helped us. Also, in this technology-driven era, it is essential to provide details of the products and address the grievances of the customers promptly.

How are you leveraging technology for customer service?

Typically, our customer base is mostly low-income rural households. Hence, we are more inclined towards the microinsurance segment. In order to effectively and timely aggregate the policies, we are in the process of adopting the point of salesperson - life insurance (POSP-LI) policy, adhering to IRDAI guidelines. With this concept, we would be providing tab-based support to the POSPs for capturing the KYC and selling micro-insurance policies on end-to-end automation basis. The policies would be registered through tab on a real-time basis and the customer will receive the corresponding information on his/her mobile.

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July 2020