The life insurance industry is poised to clock double digit growth, says IndiaFirst Life Insurance MD & CEO RM Vishakha, expressing confidence in the industry’s prospects after the Covid setback. RM Vishakha, MD and CEO, IndiaFirst Life Insurance
The life insurance industry suffered severe losses because of the Covid-19 pandemic, especially in the second wave, but RM Vishakha, MD & CEO, IndiaFirst Life Insurance, is confident of a quick recovery and the sector’s long-term growth prospects. As of September 20, 2021, IndiaFirst Life’s total assets under management stood at Rs 17,565 crore with year-on-year growth of 18 per cent. In Q2, the firm recorded Rs 345 crore individual new business annual premium equivalent – sum of the initial premium on new annual-premium policies, plus one-tenth of premiums on new single premiums) — and APE of Rs 495 crore in H1FY22. Besides, the company also paid Rs 481 crore in Covid-19 claims to over 13,000 families, with a claim settlement ratio of 99.06 percent. In a freewheeling conversation with Moneycontrol, Vishakha spoke on a range of issues, including the company’s listing plans, growth strategy, risk factors, distribution and product strategy, and more. Edited excerpts:
What is your outlook for the life insurance industry? So, how’s the growth been at IndiaFirst Life? We have been rocking; we have had y-o-y growth of 71 percent in individual new business, 3.9 times the overall industry and around 2.3 times the overall private life insurance industry. People say: ’Don’t measure based on last year as it was a pandemic year; look at 2019.’ Even then, this October, we grew 89 percent compared to 2019. YTD October we grew at 58 percent. Even if I ignored last year, our growth record is quite good this year. As compared to the industry, we have seen tremendous growth. So, I’m happy about it. I think there’s been a social change both in buyers and sellers — there’s a slight nudge about insurance. Life Insurers have paid Covid-19 claims with complete empathy and support and written huge losses on account of Covid-19. Are negotiations underway with reinsurers on pricing? Reinsurers can take a stand, they have to recoup losses, so the rates increase. That’s the way insurance functions. So, as risk goes up, the price will go up. That’s pretty basic. Have you increased prices? We have increased our term price but are still the lowest in the market. We did not further load the prices from what reinsurers gave. We are not trying to recoup our losses. We believe insurance is a long-term business, and we have to understand that. Our concern is more with losses on PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana), because those losses have been rising steadily. The increase in losses is disproportionately high; it goes against the principle of insurance. To continue to write a policy that is not priced correctly is against the principle of insurance. There’s no reinsurance support for PMJJBY, and no amount of underwriting practices can mitigate poorly priced risk. How’s your distribution strategy? Banca to remain your forte? Bancassurance is strong, but this year we also firmly ventured into agency and broking. We completed the entire business of last year by November this year. Agency is growing really well, almost at 117 percent. We have been trying to do a lot on direct marketing also, through the website. Those efforts are on and seeing some growth. From a channel perspective, bancassurance will always continue to be a significant part of our growth. The contribution of different channels will continue to grow but not at the cost of bancassurance. How’s your product composition, and how comfortable are you with that? Based on the number of customers or premium? Both? I’m counter asking because the premium size of a term plan will always be small; you can get a Rs 1 crore cover at Rs 9,000 premium. If you want to do a Rs 1 crore savings cum insurance, it will be approximately Rs 1 lakh premium for a ten-year policy period. You can’t compare Rs 9,000 with Rs 1 lakh. If I look at it as a percentage in terms of premium, you will always find it to be less than 6 percent. But, if you look at the number of customers, it’s on the higher end. We have a very clear way of looking at it. First, I say look at the customers, and it might sound clichéd. In today’s environment, there’s a pull towards pure protection and guaranteed returns. However, there is also a pull towards equity based on risk appetite, which is why we run with all products. I’ve never believed in pushing a product because the moment you push a product, you might sell it today, but persistency will fall. Today, our persistency is steadily growing, and it’s at 82 percent. Do you think that the impact/awareness around Covid-19 with regard to protection/insurance is fading away? While there’s no data or market research, anybody who’s experienced this (Covid-19) will believe in protection against risk. It’s been so hard-hitting, they are always going to look for protection. The intensity and duration of the impact of a significant change in risk orientation and protection will vary based on how far you are removed in your own experience. The way the pandemic has impacted people, insurance has stopped being a bad word or a word people need to be defensive about. You said it’s been 12 years, and you have been able to get in the top 10. Is a listing plan on the cards? BoB’s MD & CEO recently said a listing might happen in next fiscal? The 12-year journey, especially since 2015, has been really great. We wanted to build the corpus while we started the company, so there was a particular focus on group funds to have a minimum corpus. We moved to ensure the potential of banks was being thoroughly utilised, and catering to the banks. So, from 2015 to 2019, we focused more on banks, ensuring we have a good sales process and building processes. For the past four months, we have been clocking Rs 100 crore. In 2015, we did Rs 130 crore, and today we do Rs 100 crore every month. So, that’s the growth trajectory we have been on. We grew from 1,100 employees in 2015 to over 2,500 employees as of today. Many of them are in sales, not back-office, where we continue to invest in automation. In the last three years, we explored moving into new areas. As a result, we are now into agency, brokers, digital aggregators and strategic alliances. Listing is a dream, and it would be something I would really look forward to. Our team is equally excited about the prospect of listing. Everything we have been doing is the right thing for a listing, though we didn’t do it with the intent of listing. As a management team, we believe a win-win proposition is a long-term solution. So, we will be happy to support Mr Chadha (IndiaFirst Life Chairman and BoB MD & CEO Sanjiv Chadha) in realising it. Would it be correct to say you’re ready for it? You are talking to somebody who believes perfection is a moving target. We are ready now, and we will be even more ready one year from now. We have got growth, VNB (value of new business), consistent and predictable sales, good tie-ups, we are a great place to work, the top 20 in financial services, the top 10 in insurance...
Ishan Shah

In 2015, we did Rs 130 crore, and today we do Rs 100 crore individual new biz every month: IndiaFirst Life CEO

"The revised pricing will apply to policies sold from April 21. Insurance regulator doesn't allow a hike beyond 25 per cent in one go. For us, it is 20 per cent on an average. The premium on term policies had been going down traditionally. This is the first time that we are hiking the premium," says RM Vishakha, managing director and chief executive officer, IndiaFirst Life Insurance. "The spread of Covid has definitely played a role in term plan premium going up. Term policies are capital intensive. The reliance on reinsurers for a mid-sized company like ours is critical. If they have factored in Covid in premium pricing for us, we have to do it for customers as well. We have seen 30 per cent increase in claims on account of Covid-19 in a year," she adds. Term policies are typically pure protection plans that only offer a death claim in case of an unfortunate event. If the policyholder survives the policy period, he or she receives nothing unlike guaranteed plans which have an investment component to it. Note that the premium on a term plan is significantly lower than that on a guaranteed plan for similar policy coverage. Most insurance companies had seen the interest shifting to term plans post COVID-19 in 2020. However, the demand for guaranteed products is once again back. "Customers are looking for protection with guaranteed return. So non-participating insurance products have been seeing traction," says Vishakha.

IndiaFirst Life Insurance raises term plan premium by 25% in first-ever hike

IndiaFirst Life has been very bullish on the BFSI space over the past couple of quarters due to attractive valuations, says Poonam Tandon.

INTERVIEW | FII flows could remain healthy on expected US stimulus  speedy economic recovery, positive vaccine news, says Poonam Tandon of IndiaFirst Life Insurance

The risk of insuring those affected by COVID-19 need to be carefully evaluated and provided for
Dec  2, 2020 / 02:25 PM IST
COVID-19 has resulted in tight medical and financial underwriting criteria before policy issuance, RM Vishakha, Managing Director and CEO, IndiaFirst Life Insurance, tells Preeti Kulkarni in a freewheeling interaction on the pandemic impact and more
 What has been your experience in dealing with COVID-19, in terms of operations, sales and claim servicing, particularly in the context of the shift towards digital? To a large extent, companies such as ours, which had invested in digital much ahead of time, didn’t see much impact. Our processes eliminated physical submission of claim documents by enabling acceptance through WhatsApp. Having said that, for some basic documents such as death certificate, post-mortem documents and so on, you needed on-the-ground government authorities to be open. In April, May and June, there was a slowdown in the receipt of documents, but inflow of claims was much higher in July and August. There was no adverse impact for policyholders. In fact, most insurance companies, including ours, kept offices open purely for receiving claim intimation and documents, besides accepting them through the standard email mode. On the basis of what we have seen so far, I think people will adapt to digital in cases where processes are simple. If the digital process turns out to be cumbersome, they might choose the physical mode. What is the number of COVID-19 claims you have received and settled so far? COVID-19 Vaccine
How does a vaccine work? A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine. How many types of vaccines are there? There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping  human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine. What does it take to develop a vaccine of this kind? Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time. Will potential policyholders with co-morbidities face stricter scrutiny going forward? The COVID-19 questionnaire that has been introduced is an additional piece of documentation. Restrictions are coming up in higher sums insured applications in terms of tighter underwriting criteria, both financial and medical. For instance, non-medical limits have got reduced. Insurers will want to do full-fledged medical check-ups. In terms of financial criteria, earlier, for lower sums assured, we would rely on self-declaration of income. Now, we would want to see income proofs. You want to be very sure because the underlying risk that insurance companies have to watch out for is anti-selection. We need to make sure we are insuring probabilities, not certainties. Will those who had been infected with COVID-19 find it difficult to get a life cover now? There will be no such discrimination. Medical check-ups will probably be mandatory now to ensure that none of the vital organs are impacted, because COVID-19 has been the kind of virus, where no one knows what will be the impact. It has become one of those dreaded diseases because of the unpredictability. So, if a person has had COVID-19, it would be prudent on the part of insurers to carry out medical check-ups to find out whether there is any impact on the individual’s health. So, the risk of insuring someone who is already affected by COVID-19 needs to be carefully evaluated and provided for. Will COVID-19 push up insurance premiums? Even before COVID-19, many reinsurers had increased premiums due to adverse mortality experience. There has been no further revision post March and April. Having said that, insurance premiums will depend on the mortality experience. We need to wait and watch. Many life insurers have raised their term insurance premiums since March. Have you increased your premiums during the period? We have not increased premium rates, but have just introduced a new term product – guaranteed protection plan – with multiple options built in, including term return of premium and short premium payments. We have received reinsurance support, and they have not revised the rates, so we have not revisited ours. Having said that, our product has just been launched, so experience will tell, going forward. Overall, across the industry, are we likely to see another round of premium rate hikes during this financial year? I think the hike has already been factored in March-April. Unless something else comes up, I don’t see that as a problem. What is your current product mix like? What are the categories you are focusing on? We did not have an offline term product, so there is a huge growth in the number of policies, but is more of a base effect. In October, we saw an unprecedented 90 percent share of traditional (which includes term) insurance in our portfolio. We are seeing a pull towards guaranteed and protection products. What is your view about the IRDAI-mandated standardised term insurance product that all life insurers have to offer? It has been in line with intent of the IRDAI to roll out some products that are universal, in every segment. Customers know that they can buy such products from any company and the features will be standard. Will claim settlement record and premiums turn out to be the key differentiators? ​
Every insurance company can create its own differentiator. It does not have to be price alone. Companies will have to create their own niche and decide who they want to focus on. I will want to focus on customers who value convenience and are willing to pay for it. How has IndiaFirst Life’s experience been with Pradhan Mantri Jeevan Jyoti Bima renewals and claim settlement? Renewals have not been a problem. The Government has enabled and followed up with banks to keep a tight control over renewals. The renewal rate is above 90 percent. Claims continue to be adverse – have been so from day one. There is a need for premium revision, the government has been evaluating it, but then COVID struck, and it became a wrong time to re-evaluate premiums. Mis-selling continues to be a concern for policyholders. What systems have you put into place to check mis-selling? We make video-based pre-issuance verification calls (PIVC) to ensure that we can see customers and they understand what they have bought before we on-board them, especially the vulnerable customer base. We have created a potentially vulnerable customers’ grid. This includes senior citizens, people committing premiums beyond their paying capacity, less-educated customers taking higher covers and so on. Preeti Kulkarni

Medical check-ups will probably become mandatory for COVID-19-affected policy buyers: IndiaFirst Life Insurance

October 31, 2020
IndiaFirst Life Insurance, a Mumbai-based Indian life insurance company, announced that it has promoted Sunder Natarajan as its Chief Compliance & Risk Officer, according to ET report. Prior to this role, Natarajan served as Vice President and Head of Risk Management at the company. In his new role, Sunder Natarajan will lead Compliance, Risk Management, Legal & Internal Audit at IndiaFirst Life. He will be responsible for embedding the risk management framework across the business. He will also look at further strengthening good corporate governance in the organisation, according to a statement. Commenting on the appointment, R M Vishakha, MD & CEO, IndiaFirst Life Insurance, said, “As a senior member of the IndiaFirst Life team, Sunder has significantly contributed to the organisation’s commitment towards continuous development. I am confident he will continue to excel as he takes on additional responsibilities within the business.”
Sunder Natarajan has 25 years of experience in the insurance industry. In his five-year long association with IndiaFirst Life Insurance, Natarajan has led the Bancassurance distribution strategy for the company and helped build an integrated Bancassurance model with the partner banks. He is on the Strategic Advisory Board of the Institute of Risk Management India Affiliate. He is also Deputy Chair at IRM India Regional Group. Natarajan holds a Bachelor of Commerce degree from the University of Madras and a Post Graduate Diploma in Business Administration from Narsee Monjee Institute of Management Studies, Mumbai. He completed an Accelerated Leadership Programme from Indian Institute of Management, Ahmedabad and is a Certified Member of the Institute of Risk Management, London. IndiaFirst Life’s footprint extends to over 1000 cities and towns pan-India, through over 12,000 points of sale. The company has a paid-up share capital of Rs 663 crores. It is promoted by two of India’s largest public-sector banks — Bank of Baroda and Union Bank of India, which hold 44% and 30% stakes in the company, respectively. Carmel Point Investments India holds 26% stake in IndiaFirst Life. –AN

Sunder Natarajan promoted to Chief Compliance & Risk Officer of IndiaFirst Life Insurance

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IndiaFirst Life Insurance is a life insurance company promoted by two large public sector banks - Bank of Baroda and Andhra Bank along with UK's leading risk, wealth and investment company Legal & General. Its product range covers the typical needs of health, security/ protection (term insurance), savings and wealth. The company also has a wide range of group insurance products ranging from credit life, term and employee liability (gratuity and leave encashment) plans.

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Legal & General

Date	Round	Amount	Investors	Valuation Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.	Sources
6/1/2018	Shareholder Liquidity		Legal & General		1
6/1/2018	Secondary Market	$99M	Subscribe to see more	$403.85M	10
10/7/2015	Unattributed	$99M	Subscribe to see more		10

Date	6/1/2018	6/1/2018	10/7/2015
Round	Shareholder Liquidity	Secondary Market	Unattributed
Amount		$99M	$99M
Investors	Legal & General	Subscribe to see more	Subscribe to see more
Valuation		$403.85M
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Sources	1	10	10

First funding	Last Funding	Investor	Rounds	Type	Location
10/7/2015	6/1/2018	Legal & General	2 Unattributed, Shareholder Liquidity (2018)	Asset/Investment Management	United Kingdom
00/00/0000	00/00/0000	Warburg Pincus	Subscribe to see more	Private Equity	New York
00/00/0000	00/00/0000	Bank of Baroda	Subscribe to see more	Bank	India
00/00/0000	00/00/0000	Andhra Bank	Subscribe to see more	Bank	India

First funding	10/7/2015	00/00/0000	00/00/0000	00/00/0000
Last Funding	6/1/2018	00/00/0000	00/00/0000	00/00/0000
Investor	Legal & General	Warburg Pincus	Bank of Baroda	Andhra Bank
Rounds	2 Unattributed, Shareholder Liquidity (2018)	Subscribe to see more	Subscribe to see more	Subscribe to see more
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Type	Asset/Investment Management	Private Equity	Bank	Bank
Location	United Kingdom	New York	India	India

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