Bajaj Allianz CEO reveals how their profits grew at a 46% CAGR in the last five years

Not succumbing to the price war and a risk-based underwriting model has indeed paid off.

At the inaugural Insurance Asia Awards held in July 2016, Tapan Singhel, managing director and CEO of Bajaj Allianz General Insurance bagged the most prestigious award of the night – the CEO of the Year. In an exclusive interview with Insurance Asia, Singhel talks about the market trends and challenges in the region, and how Bajaj Allianz grew in size and scale over the years.

How is the insurance sector affected by the big push towards digitisation in the financial services industry?
Digitisation has transformed the insurance business model and has enabled insurers to directly sell online to customers which helped facilitate the sales of personal lines of business and also the creation of simple product and purchase mechanisms.

Insurers equipped the sales force with tablets and opened virtual offices which eliminate the need to set up brick-and-mortar offices, thereby reducing costs and enabling better distribution and access to newer markets. It also ensures that the collection of data is also systematised, enabling insurers to use more analytics in underwriting and curbing frauds.

Self-service platforms that did not exist a few years ago have empowered our customers and business partners to take insurance-related decisions independently while making available the solutions anytime and anywhere.

Today, customers can lodge the claim and the company can immediately assess the loss and settle it directly with the customer, which ensures that the company has better engagement and constant connection with its customers.

What are the biggest challenges facing the insurance sector today? 
Pricing has been a major challenge for the industry which has consistently seen mounting underwriting losses over the last few years. An increased impetus on bringing down organised frauds to some extent and sustainable pricing will help counter the high claims ratio seen by the industry. The general insurance industry also needs to step up its focus on designing simpler and more customercentric products to increase penetration in personal lines of business. Non-life insurance penetration in India stands at merely 0.8%, lower than other developing countries such as Malaysia and Thailand.

What do you consider as your biggest achievements so far as the CEO of Bajaj Allianz?
The last five years as the MD & CEO of one of India’s most customer-focussed companies has been an incredible journey. My endeavour has been to take our customer initiatives to the next level and create an environment that fosters innovation and growth even within the company. For me, achievement is when we have created a solution that has benefitted the customer and has made their transactions faster and more seamless. Continuous engagement with our customers beyond insurance by making Bajaj Allianz a one-stop shop for solutions to all the unforeseen problems faced by the customers has been the biggest achievement.

Today, we provide our customers with a gamut of value-added services apart from insurance solutions, and this has enabled us to take our relationship with them beyond insurance. The digital revolution and the culture of innovation within the company has not only empowered the employees, but has also resulted in many customer-centric industry-first initiatives such as our robust digital distribution network, mobile-based selfservicing platforms and even new-age products, the latest in the offing being a mobile solution that will enable the customers to settle their own motor claims.

What progress do you think the company has made under your leadership?
Bajaj Allianz General Insurance is the only insurance company in the Indian market that has made consistent profits despite the challenging business environment. The company’s profits have grown at a CAGR of 46% in the last five years while paying claims worth over US$2,237m during the same time period. Not succumbing to the price war and a risk-based underwriting model has helped the company improve its financial performance year on year and deliver to its customers in times of claim.

Today, we are not only one of the most profitable insurance companies in India, but also have the highest solvency in the industry. Consistent focus on digital initiatives has also enabled us to take our footprint to over 600 new towns and cities across India. We have grown in size and scale by keeping our customers at the centre of every initiative we have taken.

What are your key business philosophies?
My obsession with my customers and employees drive my business decisions. The idea behind every business decision is how it is going to make a difference in the lives of the end users, be it the customer or my employees. I believe that happy employees make customers happy.

How do you feel about winning as the CEO of the Year at the inaugural Insurance Asia Awards?
I am extremely humbled and honoured to receive this recognition and would like to take this opportunity to thank the members of the jury and Insurance Asia Awards for bestowing this accolade. I would like to thank my employees and our business partners for their unstinted support, together with whom we have been able to achieve many a milestones. It also is a reminder that we have a huge responsibility towards continuing to innovate and push the benchmark for our customers.