MEDICI Q&A with Policybazaar CEO Yashish Dahiya 

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In the wake of the current COVID-19 crisis, MEDICI has kick-started a series of webinars titled “Braving the Crisis with Tech and FinTech the second of which, “Braving the Crisis with Tech and InsurTech,” was held on April 17, 2020, co-organized by IAMAI and MEDICI. Yashish Dahiya, Co-founder & Group CEO, Policybazaar and Paisabazaar, took time off his busy schedule to participate in this thought-provoking webinar as a panelist. This video Q&A was hosted and moderated by the Founder of MEDICI, Amit Goel.

MEDICI believes in the saying, “never waste a crisis.” So in the midst of the COVID-19 pandemic, IAMAI and MEDICI have become more involved than ever in championing thought leadership through experiential media. We believe that the combined experience of leaders would help entrepreneurs and the industry at large understand how to deal with the situation and what measures should be taken. IAMAI is partnering with MEDICI, global leaders in FinTech/InsurTech content and research, to bring a series of interviews featuring prominent founders and personalities in the FinTech industry and the ecosystem. MEDICI aims to share inspiring stories and help disseminate knowledge that will support the ecosystem in braving this pandemic. 

The objective of this discussion was to learn things directly from a leader in the insurance and InsurTech space. The session was aimed at understanding how InsurTech companies are dealing with the crisis. As people become more concerned about health, insurance seems to have been positively impacted as far as demand for new policies is concerned. Will the demand surge in insurance continue to go up? These are the kind of questions the webinar aims to discuss. 

This webinar answers a huge number of questions about the insurance industry. This article provides a summary of the Q&A between Amit and Yashish. 

Coping with the crisis

Amit’s first question was centered on how Policybazaar was coping with the crisis as a business.

Yashish: We are taking a portfolio approach rather than a panic-driven approach. We have 17 business lines in which 13,000 employees are now working from home, and most of these are young people in the age group of around 22 years old. From day one, there has been flawless execution, and people have stepped up. We are re-deploying resources among these business units, and using this as an opportunity to increase our market share. E.g., in the health and life insurance space, we have upped our marketing spends. We are now, I think, the second largest marketing spender in the country.

The reason we've done that is because it's an opportunity for us to take our market share from maybe 10% to maybe 25%. I hope we come out of this crisis with more than 25% market share in health insurance, and we're really stepping on the gas for that. Whereas on certain lines, we're taking a far more cautious approach, where we feel survival is most important.

Insurance demand

Amit: How does the overall insurance market look in terms of demand?

Yashish: Wherever there was the physical leg in any process, those processes have come to a complete standstill. For instance, big insurance policies that involve medical tests or involve offline meetings. We hope they commence soon when things are better. But I see that as a short-term thing because I think we can't be in the lockdown forever. Wherever possible, we have attempted to move as much of it to the digital space as possible, and wherever there wasn't a physical leg, business is fine.

The demand for credit cards, loans, and health insurance is also fine. Even the demand for motor insurance is fine. Our attempt has been to move fulfillment into the digital space, including claims fulfillment. The industry will come out of this far stronger with digital processes. 

Overall, the industry is largely offline. Banks are a very large channel for distributing insurance. I don't know the exact number, but I think at least a third of insurance is sold by banks. Now, in the current situation, you don't want to let an insurance agent come into your house and have a cup of coffee like you used to earlier. There was a long-term trend earlier towards the protection products and a long-term trend towards online. Those trends will play out a little faster in this situation than they would have in the normal course of events.

An organizational question

Amit: Once the WFH started, did you face any challenges in the beginning? Were there things that helped now that a few weeks have passed? And, if you’ve understood how this can be done in the best way possible, is anything that the audience should know?

Yashish: We are learning all the time. But one of the things that I am particularly fortunate with is there is an intense team. What I mean by that is there are about 200 people who are extremely committed to the cause who act in a founder-like manner in the company. It’s such an arrogant statement to make, but the execution was flawless.

On the day work from home was implemented, we had exactly the same number of sales as we had the previous day or maybe more – between 10 to 11 sales. The call volume was actually higher, and the call take rates were actually higher. The conversion rates were higher, and the connectivity was higher. The number of minutes spent on talk time was higher. So they were this dedicated bunch of 200 odd people who were working day and night for 10 days before that to make sure this happened. Whether it was technologies, operations, or people forming communication loops to make sure that the same communications they had in the office – the same command and structure that existed in office – continued to function very efficiently.

That said, once WFH happened, there were certain gaps. For example, when a person makes a sale, the individual would only hear from his boss, but the celebration would be missing. Now we have mechanisms, and there is actually a celebration. People say, “Hey, so you made a sale!” and you know there is some applause coming in. People can say, “Woohoo!” or whatever, and all of those sounds are actually sort of heard. So, those are the smaller things that we continue to do.

Our training, too, has become more efficient. Earlier, we had in-person training so you could meet people and train them. But, now, we’re training employees remotely, and I think it has become better as we have an L&D department. My own communications have changed. I used to communicate a lot less than I communicate today.

“So I think, on everything, the important part was, nobody had to be told; they just did it.” - Yashish Dahiya, Co-founder & Group CEO, Policybazaar and Paisabazaar

 

What’s happening at the industry level? 

Amit: Are there too many claims happening? Any other issues? 

Yashish: I think there is no particular change in the death rate in the country. It’s sad that we’ve lost around 300 people over the last month (due to COVID19), and 30,000 people die every day. So, it cannot potentially cause a remarkable shift in the death rate in the country. 

Even in case of hospitalization, people were keener to go to hospitals earlier than today. So, there’s no perceptive growth in the claims ratios. I have seen 8-10 COVID-19-related health insurance claims come in. They are expensive. My initial thought process was COVID-19 treatment cannot be expensive, but the claims that have come in are more than Rs. 4 lakhs each.

New opportunities

Amit: Is there any new opportunity that you haven’t seen before?

Yashish: Yes, we are looking at remote fulfillment very seriously. We are working day and night to make sure remote fulfillment can become as large a percentage of our business as possible. We are not focused on remote booking because that was already the case.

About becoming a licensed InsurTech

Amit: What do you think of licensed InsurTech players like ZhongAn and Lemonade, as well as Acko in India? Why did you not take that route, like getting an insurance license and creating and manufacturing products?

Yashish: We are a marketplace. We work with 50-odd insurance companies. We have a lot of data that we share in an open architecture format with all our partners and try to see if they can create better and better products. With 50 partners out there, we have never felt the need for one more partner. Because, if we set up, we would be essentially one more partner for ourselves. We are able to get enough cooperation, enough agility from our partners that we do not feel the need genuinely. The second part is, I think it would not be fair to our partners. 

Amit: There was news about your HealthTech venture Doc Prime and a B2B venture ZPhin. So, how should one look at Policybazaar? What is happening in those ventures? 

Yashish: When you develop technology for yourself, you make it for that specific use, and it doesn’t have to look good. It has to do good. When you make it for the external world, you have to do good and look good; and that is exactly where the ZPhin comes in. ZPhin modularizes the technologies that Policybazaar has. Policybazaar has a lot of technologies that offer it to other insurance players in India and outside India, and that’s gaining traction. We have 13 clients, and ZPhin continues to do business. On Doc Prime, unfortunately, we could not get very good alignment internally. We will come back on Doc Prime in some more time with a better understanding of what we want to do.

Questions from the audiences

  1. Our insurance sector seems more product-centric than customer-centric. For example, insurers overseas for motor insurance are extending policies for the period of lockdown. You don’t see much of a lead on customer communication in times of crisis in India. Your thoughts?
  2. What are your views on the post-COVID-19 work era?
  3. From a product perspective, should insurers treat this as a one-off event, or will they be forced to work on newer models accounting for such eventualities? Will the prices go up?
  4. Has an awareness of health products increased given the current pandemic scenario? Will this result in a demand for digital health products in the coming days?
  5. What's the reason that no InsurTech business model, except web aggregation, has worked in India? Do you see that changing?
  6. Has the entry of Paytm, Flipkart, etc., in insurance distribution affected the business? If yes, in which segment? 
  7. What is the biggest challenge of why people shy away from health insurance?
  8. It is interesting to note that for years, claims plus expenses are always greater than premiums earned, and therefore insurance companies have annual operating losses and therefore have to depend on investment earnings to generate profits. Why is pricing or underwriting not improving in India?
  9. In the next few months, in terms of customer acquisition, do you see the source of growth for you? Is it going to change? Are you going to spend on certain channels more than the other? Does it look very different from, say, last year? 
  10. Is there any specific help or support that you have seen coming from the government or the regulator for players like you?
  11. Are there any programs or initiatives that you have taken to help people, help the country, help the society, or help the ecosystem? 
  12. We don’t see many preventive health care insurance models in India. Only event-based. It’s better management of risk from an insurer’s perspective and better health from a customer’s perspective. Your thoughts on that? 
  13. What’s your take on bite-sized insurance? Do you think India will see more bite-sized insurance products in the coming days?

To know the answers to these questions and for more in-depth thoughts and views from the panelist and the presenter, please watch the recorded webinar here.