Digitalization helps maintain persistency levels of insurance policies

Due to the uncertainties around life and money, people have been prompted to opt for life insurance policies offering financial security amid the COVID-19 outbreak. Besides opting for new policies, people have become increasingly conscious about staying adequately protected, and that is why a significant population is renewing policies on time.

Persistency ratio is the ratio of life insurance policies that receives timely premiums in the year and the number of net active policies. The ratio for each year is calculated for an exposure block e.g., a financial year and is estimated in the first month of the next year and so on i.e. the one-year persistency ratio is indicated as 13th-month ratio and so on.

“In the case of persistency level, while we had some issues in April 2020, but May onwards we were back to doing more collections than the pre-COVID times. Our 13th-month persistency has gone up by 200 basis points compared to the same time last year,” stated Kamlesh Rao, MD and CEO, Aditya Birla Sunlife insurance. “Digitalization has played a big role here. Our Artificial Intelligence (AI) driven Conversational Renewal Bot offered a seamless digital renewal engagement journey, helped policyholders to renew their policies anytime, anywhere”, he added.

Ashish Rao, Chief Customer Experience & Operations, ICICI Prudential Life Insurance said that recently, ICICI Prudential Life has launched a speech recognition AI-humanoid for renewal premium reminder calling. “With this automated solution, we can reach out to over 50,000 customers in an hour and can converse with customers in multiple languages. For the period from March 2020 to December 2020, we reached out to over 4 lakh customers and approximately 87% of customers contacted paid their renewal premiums. Our customers can make renewal premium payments through net banking, UPI, ECS, credit and debit cards, Google Pay and other mobile wallets,” remarked  Rao.

During the pandemic, technology has been the centre of all customer engagement activities for insurers. Whether it is self-servicing insurance portal for customers or AI-enabled bot, all-digital offerings have been designed to enhance customer experience and reduce time for servicing them and facilitating new business and renewal transactions.

Kayzad Hiramanek, Chief, Operations & Customer Experience, Bajaj Allianz Life said, “We developed WhatsApp services just at the onset of the pandemic. And over 11 lakh customers used this platform over the year for renewal premium payment, sourcing new policies, and servicing existing policies,”.