Call this Covid-19 effect. Bajaj Allianz Life Insurance Company Ltd ( BALIC), a private life insurer, has decided to remodel its distribution and introduce concept of ‘shoppes’ that will replace its branches as part of a new ‘Digi Serv’ infrastructure model.
These ‘Shoppes’ will essentially be smaller sized outlets (say about 400 sq ft) that will be rolled out on a pan-India basis and offer digital services as digital touch points to customers, Tarun Chugh, Managing Director and CEO, BALIC, told BusinessLine.
This will enable BALIC to move closer to customers, so that they can meet and engage with the company, he said.
With the pandemic changing the rules of the game overnight for the insurance industry, players like BALIC are looking to adopt transformative strategies that will help them thrive in the post Covid world. The entire process of selling insurance products has transformed for insurers with the digital channel at the forefront of the distribution model being deployed.
“We are taking a relook at the office space we have. We are reducing the size of our offices. With remote working now becoming a culture, this concept of Shoppes will add flexibility to our employees — they can come in only when required. We will now look to open these Shoppes in high street areas,” Chugh said.
Thanks to the pandemic and the ensuing lockdown, Chugh said the company’s customers, agents and employees have all taken to digital in a big way.
To begin with, the ‘Digi Serv’ infrastructure model is being rolled out as pilots in Mumbai. Depending on this success, it will be rolled out across the country, according to Chugh.
The amount of cost savings and margin expansion this distribution model change will bring to the company is difficult to quantify at this stage, he said.
Chugh highlighted that the pandemic has compelled customers to buy term and guaranteed return products.
“Customers are getting more risk averse. Unit Linked Products have taken a hit — markets have moved up and people are not able to invest. Term products are going up. For us one out of every four products we sell is a term insurance product,” he said.
Chugh said that despite the lockdown, the company did not witness any degrowth in the first quarter this fiscal. In fact, the new business premium in July this year grew 29 per cent at ₹179 crore (₹139 crore).