V. Viswanand (deputy managing director Max Life Insurance) spoke with EconomicTimes.com about the three Ps (products, processes, and partnerships) that the joint venture between Max India Ltd. and Axis Bank has used to distinguish their brand in a highly saturated market segment. It is important to understand that Max Life, despite being privatized for over two decades, has not been able to innovate or tap into the needs of the underserved customer. With the shift towards digitalisation of consumer services and the rise of digital-native brands, as well as the advent of social media and smart phones, traditional industries such as insurance and banking are responding quickly to changing consumer needs. The popularity of DIY (Do-it-yourself) products that are tailored to your individual needs has increased.
Walking this terrain of technologically-fuelled innovation is the three-Ps playbook of Max Life Insurance. The company’s deputy managing director explained how they have been challenging the status quo in life insurance, which was primarily used for selling money backs and endowments. V. Viswanand spoke about Max Life’s pioneering “first permanent plan” that lasts a person’s entire life.
A key part of embracing reforms is to ensure that customer service and onboarding are improved.
V. Viswanand (Deputy managing director), Max Life Insurance decoded the threePs or the three-pronged strategy, which he claimed has allowed Max Life Insurance to emerge as a leader in the cluttered segment of life insurance. We’ll take a look at Max Life Insurance’s diverse product lines, intuitive services, tech-enabled customer journeys, and its commitment to ESG.
Insurers need to understand how the millennial market is important This outlook is complemented by the extensive listening of “consumer insight” from a cross section of respondents, including in-house surveys like the India Protection Quotient and the India Retirement Index Study. These surveys are conducted year-on-year to identify trends. Although protection is still the main reason customers sign up for life-insurance products, it has become the largest driver of demand. This trend is in line with the growing number of millennials who are attracted to investment to ensure effective retirement planning. Many of them want to work hard, party hard, and retire early.
The booming and bullish segment millennials are keen to build a retirement fund. However, boring or conventional products like a premium policy with a 20-year term or 10-year policy are not what they want. Something like the Max Life Insurance ‘Smart Wealth Advantage Guarantee Plan’ –or the apt acronym SWAG–brining in flexibility and allowing for permutations and combinations with their 90 variants is more likely to find favour with this technologically-tuned and well-informed consumer base.
The homemaker segment is historically underserved and overlooked. India has a population of 45% women. However, the vast majority of these women are not part of India’s formal economy and workforce. As such, they cannot produce a payslip nor show their income tax returns (ITR), to meet the insurance consumer’s requirements. Max Life Insurance fills this gap. Max Life Insurance provides independent, pure-term protection for the homemaker who was traditionally dependent on her husband’s insurance coverage, only receiving half. This dependence can be broken down to empower homemakers. This segment can provide growth opportunities for insurers and open the door to a wider and more inclusive life insurance market.
Max Life Insurance also participated in the fixed deposit segment. Taxation is a problem in the FD market. A consumer is subject to tax upon their return. This means that a consumer will be overburdened to have to pay tax on their ITR. This can lead to a lower net return. Max Life created the Smart-return Digital Plan (SFRD) to address this problem. This new-age plan offers both tax-free returns and protection for life.
Max Life SFRD plans come in three versions to meet new-age investment requirements. It is a simple savings plan that makes it easy for customers save money and plan ahead to reach their financial goals.
Simplifying the online customer journey
Financial services have been reinventing their products and services, riding on the technological revolution, particularly leveraging new technologies like artificial intelligence (AI), machine-learning (ML) or robotics. The new products and services are designed to appeal to the digital-savvy customer who demands creativity, nuance and personalisation at every stage. Technology has been an essential tool in unlocking a customer journey that is changing.
V. Viswanand pointed out that in today’s age of do-it-yourself, customers are reluctant to speak with a call center executive because they want minimal intervention. Technology has enabled one-third our online shopping journey to be completely automated by humans. We found that chatbots are a fascinating innovation. People prefer chatbots to talking with people because they feel in control and that they can get neutral advice em>.
The company discovered that customers were looking for the revolutionary ‘buy now, pay later’ model. Max Life began to address this latent demand by offering a one rupee upfront payment and underwriting the policy so that the customer can access all aspects of the financial and medical spectrum. V. Viswanand stated that Max Life Insurance is ranked first in Google for term and life insurance searches. They are also able to outperform the disruptive digital-native fintech firms. How? How? By educating customers and creating awareness at the frontend. A medi-check fraud prevention was conducted using an AI model to scan model centers. This routinely caught about 3-4% fraud diagnostic centre. Technology can also be leveraged to provide customer satisfaction and joy, such as common diallers that ensure fewer calls to customers, voice-to-text speech analytics for seamless script adherence, and higher conversion data ratios.
The ESG agenda and the partner ecosystem
V. Viswanand cited the SWAG product as an example. He also recalled how the model was shaped by insights from a bank partner. The ‘buy now, pay later’ model was similarly shaped using insights from a casual remark made by a web aggregator asking why insurance is still considered the only product category in which the customer must pay first, and then the company has the right to accept them as a life or refuse them.
In India, reducing the burden of goods and services tax (GST), can help increase life insurance penetration. This is because Indian term prices overwhelmingly target the salaried affluent class, while leaving out the larger and more untapped micro, small, and medium enterprises (MSME), population. In order to get a lower tax bracket, many often underreport their income. A key factor is to eliminate tax on annuities, or at least the chief component, and only tax the interest portion as in Western countries with higher insurance penetration.
Max Life Insurance has influenced policymaking by converting most of its infrastructure, from logistics to office transactions, to digital. This greatly reduces the carbon footprint. V. Viswanand explained how the company took steps to ensure that 14,000+ employees were involved in these initiatives. Max Life Insurance launched India’s second-largest ESG Fund, which helped it to gain more visibility among the millennial segment.