Mr. Samiran Lahiri, Executive Director cum CEO, Partners Partners Insurance Brokers-India.

Mr. Samiran Lahiri, M.A (Economics), AIII is the Executive Director cum CEO of Preferred Partners Partners Insurance Brokers-India, a coveted member of world’s largest broking network called “UNISON STEADFAST” headquartered in Germany. He has previous working experience of over 3 decades in Insurance Industry of India, Mauritius and Nepal in various leadership roles like CEO- Asia Meditech Solutions-Nepal, President- Peerless Group India, Chief Operations Officer of Rainbow Insurance-Mauritius, after starting his career in Oriental Insurance-India. He has handled more than 1,00,000 claims as a property-casualty claims specialist and is the winner of the illustrious Bhagwandas Peraj Memorial award for having stood first in the Associateship examination of the Insurance Institute of India with Marine Insurance specialization. He is a regular speaker on Insurance at various national and international forums and has journal publications, several media interviews and tutorial materials on technical issues of insurance distribution, coverage, claims etc.

   Q. Insurance companies are into stress how you think this will affect your business?

Insurance companies are indeed into financial as well as non-financial stress. This is evidenced by the fall in the industry figures both in the life and non-life sectors. The Life business has shown a fall understandably of 30% in the month of March 2020 and the General insurance has shown a decline of 15% in the month of April 2020. 

The fall up to July 2020 as compared to the last fiscal has been about 1.36 % in the non-life segment. Interestingly, stand-alone Health Insurers have shown a growth of 22.95% up to July 2020. The Life Insurance companies have shown a fall of about 18% up to June 2020.

Apart from such fiscal stress, there has been non fiscal stress mainly due to working from home, excessive pressure on the digital capability and online infrastructure, employee safety, office hygiene etc. Major expansion and investment decision were put on hold, product launches were delayed, meetings were converted into webinars and all the stakeholders had to be re-oriented into the new circumstances apart from the usual health-stress. The business of Brokers also suffered on account of delayed response from the Insurance companies, some conservatism in underwriting, somewhat slow response in document issuance and claim processing. 

For Broking companies, there have been instances of delayed receiving of the brokerage in view on initial non-acceptance of digitally signed soft copies of brokerage invoices. Risk inspection schedules with participation of Insurer’s representatives and joint meetings were also postponed or even cancelled. Generally, the business may suffer in the near to mid-term due to hardening of rates, stringent underwriting, and imposition of stricter conditions. However, we perceive this as temporary and in the long run all the parties will re-engineer their business models and bounce back confidently. 

    Q. There is a lot of redemption pressure on life insurance companies, what is your experience?

Though, we are not into Life insurance business much but we understand from your query that redemption pressure is indeed building up on Life Insurance companies. In case of our Broking entity, we have received several requests of accepting post-dated cheques, banking the cheques in-hand at a later date and finally we have seen cases of dishonouring of cheques. Such cases have been seen in mostly for policies with annual mode of payment.

    Q. What kind of challenges have you faced in the last 5 months?

I have categorized the challenges of last 5 months in 4 categories in the domains of:

a) Operations

b) Underwriting 

c) Claims servicing

d) Documentation

e) Receipt of remuneration

On the operational front, the main challenege has been delayed reponse from the Insurance companies due to complete closure of offices and thereafter due to limited man power. A sudden reliance on Insurer’s digital capability and infrastructure yielded mix response depending on the on-line readiness of the Insurer.  The quotes from the Insurers took longer time for mid to large risks and for somewhat complicated risks.

For motor claims, most of the Insurance companies proceeded with video surveys followed by video negotiations for settlement and as such the service was not hampered much. For property claims, the physical surveys were severely delayed. For liability claims however, which are mostly processed on analysis on various documents ,the pandemic impact was not much.

I would reckon that in many cases the data entry man power at the Insurance companies had limited access to the computer as well as limited attendance in the brick and mortar structure. As a result, the document issuance for non-vanilla or non –templeated policies became slow. The challenges faced from the customers were mainly non-renewal or deferment of renewal. This situation was mostly seen in retail, MSME and SME sector where insurance took a back seat in terms of priority and that was quite natural since these entities or individuals had more compelling and more perceived “essential” expenses to tackle. The mid to large corporates and the properties with Bank hypothecation effected their renewals rather smoothly in a routine manner and in fact putting less stress on the Broker and incumbent Insurer by not subjecting them into a bidding process during such pandemic.

    Q. What are the challenges you anticipate for the next 7 months?

Once the COVID -19 situation comes under control (at least to a large extent), the insurance world has to consolidate its position and assess the impact of the outbreak. There may not be much of business challenge since the economy is gradually opening up. The re-consolidation challenge will come in tackling and enhancing the digital self-service mode, designing clear work flow, using more and more image processing technology, artificial intelligence which will be the features in new normal time and will stay with us. 

Cyber security will also be a concern since during the lockdown period, sourcing of business increased through digital channel and such areas were definitely exposed. COVID-19 claims were not generally factored into while pricing the medical insurance products. This needs to be looked into and the actuaries have to check the additional burden (if any) caused by COVID-19 claims. Surely, the additional burden will be partially offset by less number of hospitalization claims during the lockdown especially the accident linked hospitalization and deferment of planned surgeries. Financial uncertainty definitely has caused deferment of some Insurance purchase plan in retail segment due to job losses, salary cut etc. This business had to be brought back and will remain a challenge.

    Q. Do you think online sales will take over traditional sales in the next 3 years? 1) If Yes, Why? If No, Why?

Online sales will surely increase but in India it can never take over traditional sales in next 3 years. The reasons are multi-fold:

The customers here trust the sales person more than the Insurance company in case of most of the retail products. We need a face to talk to and a collar to catch in case of any problem. On a more serious note, in India, insurance business is not just confined to metro cities where the net connectivity is good. The situation of internet service is not up to the mark in rural and mofussil areas. Apart from the above factors, anything beyond pure vanilla products need clarifications, case specific ratings, specific warranties, deductibles and customization to some extent. This is by and large not possible in online sales. The Insureds need many upfront clarification on claim related issue as well which is possible only in case of human interfaced sale.

    Q. Are you into Retail marketing, if yes what are your future plans?

We are not much into retail marketing. However, once the pandemic wanes out, we have an ambitious plan of targeting various middle class apartment complexes for promoting householder insurance, personal accident and family health insurance. Insurance awareness workshops will also be simultaneously held. Like many others, I am also a firm believer of the notion that it is not all about increasing the share of the cake but increasing the size of the cake. Enhanced awareness increases the size of the cake. Eventually, we propose to take the campaign to other places.

    Q. Do you have a POS network, if yes how it’s doing and what are your future plans?

POS is a very interesting concept allowed by the IRDAI. We launched a plan of POS engagement around March but the same could not really take-off due to the outbreak of COVID-19. We are planning to have a hub and spoke model with POS in spoke locations. The hubs will be the normal Branch locations. I personally feel that the POS model has immense potential in broking space and it is a low cost model which is the order of the day.

    Q. Where will the growth come from in your company?

The growth in next 1 year is expected to come mainly from our existing clients with addition of new policies, revision of sum-insureds. The exports will increase from India especially to African continent. We have a good hold on these exporters and especially the EPC clients. This will be a growth stimulus. The enquiries on Business Interruption and Credit Insurance are also increasing. The service continuity during the pandemic time with regular communications and updates to clients will surely yield results. We were engaged with all the members in our eco-system and the fruits will come now.

    Q. How many Covid-related claims your company has received so far and how many have been paid?

Our company fortunately has received only 2 COVID related claims fairly recently. These claims are likely to be settled soon without any objection having been raised by the Insurers. 

    Q. Which product do you think will do well in the next 2 years and why?

 As we say there are 2 countries within our country namely India and Bharat. In Bharat, certainly the products like term life insurance, health insurance and burglary insurance will do well apart from the motor insurance since people have realised the need of mobility during such lockdown times and uncertainty about public transport. 

Economic prosperity is also bound to take place from the next fiscal and motor insurance will get a boost. In the India segment, event cancellation insurance, trade credit insurance, business interruption insurance will do well apart from professional indemnity and cyber-crime insurance. We have a regulatory environment in India which is supportive of innovative use of technology. In next 2 years, sandbox products and more, right and simple technology will act as a catalyst for customer delight what I call ABCD of Insurtech i.e. Active Boost for Customer Delight. 

It reminds me of InsurTech Hub Munich (ICHM). As we know, this is a multi- participant, multi – sector platform for devising innovative insurance products. It is a body comprising large Insurers, start-ups, university, research institutes and government aiming to transform the future of insurance. In India also, there will be boom period and innovative products will be of significant demand. The Government, IRDAI and the Insurance carriers has to take this initiative in perfect synergy.