Engaging with Videcon to create insurance schemes that add value to their products: Milan Naik

Though the industry is facing a slowdown, Milan Naik, Country Head (marketing and institutional sales) of the one-year-old general insurance company, Liberty Videocon, talks to ET.com on how he plans to increase his company's footprint and test innovative distribution channels in 2014. 


You started your operations on 1st Jan 2013 and will be completing a year soon. How was the first year in business and what are the plans for 2014?



The first three months of this year we were on a soft launch stage. Business started kicking off from 1st April onward. Overall, we have made a significant progress. We were able to collect a gross direct premium of Rs 39.25 crore in the first quarter itself.

Fortunately, distribution hasn't been a very big challenge for us. The acceptability of the brand, both at the customer and distributor level, has been quite high. Within a year we have build quite an enviable distribution setup be it on the motor dealer side or agency front or banks and affinity.

We have exponential aspiration for 2014. From the product-mix strategy angle, we want a mix between motor, non-motor and commercial lines of business. A lot of companies have largely become motor dominated books but we do not want to be skewed in one direction.

All in all, our building blocks are very much in place and if we do the basics right, 2014 will be much more exciting for us.

Icra estimates the general insurance industry growth rate would be around 15% in FY14. Being the latest entrant, does this bother you?

We being an industry where the growth and the perspectives of the industry being completely linked to the economic growth, any slowdown there affects us directly.

This year, there is a clear slowdown in the industry largely attributed to the drop in car sales. As a large part of industry's retail business is motor insurance, the industry got impacted negatively. The other key area is business related to infrastructure growth and commercial line products. Projects which were about to take off and were awaiting approvals didn't come through. So we were affected by that as well.

But if we start seeing in terms of different product level growth rate, the rest of the products have been showing double-digit growth rates. So, there is no such slowdown across other verticals. The health segment has been doing very well—both at individual policyholder level as well as the government spending money on propagating and driving health insurance penetration.

Agents and brokers still get the largest chunk of business. Any new channels of distribution you plan to explore in 2014?

The conventional channels for us till now have been the motor manufactures and dealers, who play a very dominant role in the motor side of the business. Then you have the agency force, which is also a clear focus area. But we would want to drive growth on alternate channels like bancassurance or affinity business that are established models globally.


The co-operative and the regional rural banking segment suited our requirements and currently are our business base. Within the first year of operations we have already forged a partnership with about 25 banks. We believe this could be one of our claim-to-fame strategies. We would be one of the fastest growing bancassurance players in the country.

Affinity is another globally tested model which we plan to try in India. The idea is basically to find and tap large set of homogeneous customers who come to a place for a common purpose and associate with a common brand, that is, have 'affinity' with the brand. That's where we see ourselves playing a significant role.

The opportunity is immense but the key here will be execution. Most companies look at this as just underwriting another product but this has an element of marketing as well. You need to understand the client, their brands, what their brand stands for, what their sales processes are and how you do then create a proposition which is aligned and seamlessly fit into the product they are already offering.

We see ourselves making a lot more investments in these areas and build significant presence in that market.


  So right now the sole focus is on distribution and increasing footprint?

Product innovation is a parallel process. Creating products and unique propositions for our partnerships and even for the newer relationships has to co-exist with distribution. Now we are at a stage were we firmly that because of our stability in our systems, technology, the teams are in place and a larger distribution network, we believe that we are in a perfect stage we can start engaging with more established entities like NBFCs and large private sector banks. That's what we are focusing at right now and we are already in talks with some of the leading private sector banks.

What about public sector players?