Ritesh Kumar,
MD & CEO,
HDFC ERGO

Ritesh Kumar, MD & CEO, HDFC ERGO speaks to Rachita Jha, ENN, about the role of technology in shaping the insurance industry

Your reflections on the low rural penetration of insurance in India.
There are two aspects, one is that insurance sector is in some ways a reflection of the overall economy. As an industry we insure the existing asset and incremental asset, and a direct co-relation if the incremental asset is suffering so is our industry. Rural penetration of insurance in India is a concern. More than 70 percent of the population lives in the rural India and 15 percent of this population has a socio-economic profile that is akin to the urban population, so we are talking about 150 million people who have spending powers in rural India and problem really lies in distribution and logistics. Thus there is significant under-penetration, there are fewer schemes that are customized to their needs and reaching out to this dispersed population is a challenge. However, there is an increased focus on addressing this lacunae and schemes such as the RSBY has given the desired push from the government as well.

What were the key success factors of RSBY?
Today, the world is trying to learn on success story of RSBY. The scheme has made it possible for health benefits to reach the target audience and right beneficiaries for the first time, and it has been successful only because it is using IT. That was the cornerstone of the scheme, it is an automated process. The government has been very forthcoming in partnerships. Out of the four districts that we have done in Bihar, we have already covered 60,000 claims, that to when we are one of the partners and also a late entrants. The challenges are of fraud prevention and that continues to be in health claims and all other insurance sectors.

Tell us on the IT initiatives at your company, how can mobile technology been used?
As a company last year we issued close to 3.4 million policies, 5 million customer base, we handle 350,000 claims, and if we can service these policies appropriately and each one of policy holders gives back a positive feedback. So we have created a customer experience management set-up and largely cater to post-policy holders and have a cap on grievances and complaints of customers. About 88 percent of the policies we issue are on fully automated model. As an industry, we are hugely paper driven in policy issuance, claims, renewal “ all are primarily on paper. We are not yet authorized to give an electronic form of policy. Hence, the insurance industry cannot be paperless.
We have Insurance Portfolio Organizer (IPO) which is a mobile app that gives all the details of the policy and can help you connect with nearest cashless hospitals, we also provide our customers to track the status of their claims. Thus today mobile offers us a convenient and easy connect with our customers to offer them our services anytime anywhere. Considering that each year we issue 12 crore policies, have 3 crore claims and 15 crore transactions every year, for the industry as a whole, technology will be an important tool to bring-in efficiencies and cost benefits,. Thus, unless we leverage on technology, the cost of delivery will be too high.

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