April 2015 | Priyanka Hosangadi

'We want to be among the top three general insurance companies by 2018'

KK Mishra, MD and CEO, Tata AIG General Insurance, has been part of the company’s growth story since its inception 14 years ago. Mr Mishra tells Priyanka Hosangadi how the company’s innovative products changed the rules of the game and helped it reach the $100 million mark in just four years. He also discusses the way ahead for the company and what the Insurance Laws (Amendment) Bill, 2015, means for the sector.

Could you retrace the highlights of Tata AIG General’s growth over the years?
Tata AIG General Insurance was one of the first companies to get a licence to operate in 2001. Right from the beginning, we were clear that we would not crave market share. There was a clear mandate from the shareholders that we would have to be a company driven by customer service, profitable growth, and of course, be amongst the best known ethical names in the market. Our dream was to set up a company which would be a benchmark for the Indian general insurance industry.

Right from day one, we kept introducing innovative products in the market, servicing customers through cutting-edge technology and providing claims-related service with empathy. A few examples of our firsts are the 24x7 call centre for customers, new products like the Directors and Officers (D&O) liability policy and the claims car. We launched travel policies online and issued them based on the customers’ declarations without waiting for medical certification or tests, which was unprecedented in India.

How did the company reach the $100 million mark in just four years of operations?
Differentiation in products, innovative covers or insurance policies for new risks, and service with empathy at the customer’s doorstep were our focus areas. As per the market demand, we catered to the needs of regular insurance businesses such as fire, engineering and motor, where premium rates were tariffed or governed by the regulator. Since these covers were regulated, no differentiation could be made either at the service or cover level at that time. However, we concentrated on areas like financial lines, casualty, travel and marine, which did not have regulated premium rates. We introduced new policies in marine insurance like turnover covers. Due to these differentiations, we managed to achieve the magic figure of $100 million in just four years, although the projection was six years.

What advantage does the partnership with AIG offer?
The partnership brought in the intellectual and professional advisory role of AIG, the biggest insurance conglomerate at that time. Innovative products and practices that AIG was known for in the international market, like direct marketing, 24X7 call centre, IT-based platform for issuing policies, risk inspection, marine risk control, international travel, international shipment and financial lines covers, were introduced in India by Tata-AIG.

What are the major challenges that you have faced so far? 
Our biggest challenge has been running the company ethically against prevailing market forces. The second was that the market did not have an agency force for general insurance companies. So we had to create it ab initio. We faced a challenge on the service front as well as sales, since we did not go in for auto manufacturer tie-ups. We introduced the concept of safe repairs for cars insured by us. After stringent inspection, we accredited certain car workshops as ‘Auto Restore Garages’ (ARGs). Thus, we guaranteed repairs and replacements carried out at our ARGs.

Another challenge was servicing customers across the country. Last but not the least is recruiting and keeping talent, and motivating employees to have better skill sets. This is important for sustainability and the company’s long-term goal. The Tata-AIG Academy was set up to tackle this challenge and it is doing a great job of skill building at all levels. The good news is that the company’s present top line executive team has been with us for over 10 years.

The Insurance Laws (Amendment) Bill, 2015, is expected to be a game changer for the sector. What changes do you foresee?
With the insurance amendment becoming an Act, there is a lot of buzz and some foreign partners have shown an interest in increasing their share in the market. In the long run, this will help in the flow of foreign exchange. It will also facilitate sharing of knowledge, innovation and best practices of interactional players. A better professional approach to the insurance business is the need of the hour since insurance is still a product which is sold and not bought.

The amendment puts the onus on insurance companies to avoid mis-selling because the fines which have been prescribed are huge. Insurance companies will have to set their houses in order and provide better professional service to consumers. 

What are the company’s future plans?
We want to be number three amongst private insurance companies and number one in return of investment (ROI) by 2018 with the best combined ratio. We will not be running after market share — our innovative products and tie-ups with a wide range of distribution partners will catapult us to that level.

Digital insurance is the focus area going forward as well as a wider and deeper footprint. We will also look closely at the consumer lines business, i.e., health, auto and travel. We want to maintain our profitable growth in the commercial lines business.