Success awaits only those insurers whose promises are backed by real actions.

 Subscribe to our Telegram channel and get the latest news first

More to the original

Insurance companies are engaged in a fierce competition for every client. The main tool in this fight is not only and not so much price, but the quality of the settlement and additional services that the insurer can offer.

Irina Gevel, Chairperson of the Board ofAlfa Insurance, spoke about how to achieve customer satisfaction, the new CASCO product, entering the VHI market for individuals, and plans for 2018.

The beginning of a new year is always an opportunity to take stock. Can you tell us what you managed to achieve in 2017?

We finished 2017 well in terms of achieving the objectives set by the shareholders. The company collected UAH 577 million in premiums, showing a 21% increase, and turned a profit. We've done a lot to optimize business processes, reduce costs, and improve the quality of service, which clients will see in terms of auto insurance settlements and in the work of the medical contact center. We've increased the number of clients in the voluntary health insurance (VHI) sector and have worked extensively to improve the quality of our medical portfolio. Our future plans include increasing the share of VHI, including through a brokerage sales channel and the launch of medical insurance for individuals. Cargo and property insurance premiums grew by 74% in 2017. We plan to grow even further this year.

What about IT-related projects? After all, your company has always paid close attention to the technological component of its business.

We've migrated our data to cloud storage, which is quite expensive, but ensures its safety and maximum security. We also acquired a new front-office system in 2017, which is already in production. Its main advantages are that it is more modern and convenient for both clients and salespeople. We also launched a new agent incentive system that allows them to earn essentially unlimited amounts of money.

So, you're continuing to strengthen your digitalization?

Yes, we're actively integrating digital solutions into our business. Although this isn't always obvious at first glance. For example, you might have developed a mobile app or added an extra button. But the point is, behind the "button" lies a host of smaller processes that ultimately yield significant improvements in service levels, ensure cost reductions, and allow for more flexible pricing. Overall, we're eager to transition completely to electronic document management, both with partners and clients. But there are certain discrepancies at the legislative level, regarding the need to provide paper copies of documents certified by a signature and seal. Such bureaucracy and legislative contradictions greatly hinder business. Although we are confident that these barriers will be removed eventually.

Do you receive support from shareholders?

—Since the company is part of the largest financial group in Ukraine, this gives us access not only to financial support, but also to the colossal experience of our shareholders and partners. From customer service to the same digitalization. In other words, we are glad to have an "older brother" who can always lend a strong shoulder.

In the summer of 2017, you said that you intended to develop bancassurance. Have you already made progress in this direction?

—Yes, this is one of the priorities. We have established sales of a whole line of our products through the banking channel. The full launch took place on March 1st, and we immediately saw good sales dynamics. Property and accident insurance is sold through the bank's cash desks; managers sell extended property protection and voluntary health insurance for individuals, insurance for portable equipment (smartphones), and insurance for those traveling abroad. Plus, there are a number of other products that will soon be launched through the bank.

A new product, "Spravzhni CASCO," was recently announced. Can you tell us more about it?

—In fact, it's difficult to offer something unique in CASCO that isn't already on the market. And I don't know if there's a need for it. That's why we decided to launch a simply high-quality product that will fully satisfy customer needs. That is, it's a full range of risks with the option to choose maximum or partial coverage, clear and transparent terms of the contract, which, as written, They read it like this: fast and comfortable settlement.

What exactly is meant by "fast and comfortable settlement"?

Now, accident commissioners with tablets arrive at the scene of an accident to calculate the amount of damage and direct the client to a specific service station, where the car will be immediately repaired. In addition, our new CASCO product includes a mechanism for completely remote settlement of minor damages. Without visiting the company's office. For example, a broken windshield or a dented bumper. The client simply needs to photograph the damaged parts of the car and send them to the e-mail specified in the contract. Specialists calculate the compensation amount and inform you of the available options for receiving it. For example, to the service station's account or in person. All this takes no more than three days. Moreover, this mechanism is already working, and we have successfully made the first payments.

The company announced the launch of medical insurance for individuals. But why now?

—Several factors coincided. We have a large portfolio of corporate clients for voluntary health insurance (about 60 thousand insured as of today), we have the expertise and statistics, which made it possible to create a product for any consumer, regardless of their income and needs. In addition, a certain catalyst was the medical reform, against the background of which the population had many questions. So, we decided to give a simple and obvious answer: when purchasing a voluntary health insurance policy, the client knows exactly what he is paying for, how much he is paying and what scope of services he will receive. Everything else is the responsibility of the insurance company.

What will the product be filled with?

— We offer 6 insurance programs priced from UAH 1,050 to UAH 32,000 to satisfy as many clients as possible. The specific services needed and the price are entirely up to the client. This means that guaranteed emergency care at departmental clinics is available for one price. A policy that covers any health issues and ensures treatment at the best and most expensive medical facilities will cost correspondingly more. Overall, there's a choice, and our programs are suitable for everyone.

Sales actually began in February. We're currently finalizing the website to launch online health insurance sales and are rolling out a new medical contact center in one of the regions.

Why not Kyiv?

It's easier to find employees there, as competition in this niche is quite high. Our goal is to attract specialists with a medical education. Such people are rare. And when they are actively "hunted" from the market by large insurers, the search becomes an even more difficult task. That is why we decided to create a contact center outside of Kyiv, as this simplifies the recruitment process.

And what are the forecasts? When will retail VHI become profitable?

—I am sure that the VHI portfolio for individuals will be profitable in any case. It is difficult to talk about specific figures, but there is no doubt that we will be in the black as early as 2018.

But most insurers avoid this type of insurance precisely because it is characterized by high unprofitability.

—I cannot agree that retail is anti-selection and results in solid losses. Firstly, there are very few statistics on this market segment in principle. Therefore, drawing such conclusions without actual figures is incorrect. Secondly, we not only believe that individual health insurance is in demand, but we also see this based on initial sales results. And it seems to me that our retail VHI portfolio will ultimately achieve a financial result comparable to the profitability of our corporate portfolio. Moreover, frankly speaking, the risk level for 1,000 insured individuals is much lower than for a contract with a company with 3,000 employees.

How will sales be structured?

We will focus on our own regional network, online sales, and partner banks. We are also considering sports clubs as potential partners. Through them, we can attract clients who lead a healthy lifestyle and who will definitely be interested in such a product.

What are the company's plans for the CASCO segment, given that new car sales have been growing for the third year in a row?

—Growth in auto sales is stimulating an increase in financing volumes, which means growth in the CASCO market. So there is definitely someone to sell protection against motor risks to. At the same time, we see great value in direct contact with the client. This allows us to increase volumes through high-quality service and a positive reputation among policyholders, which is not always possible with financing. But this does not mean that we do not want to expand our network of partners. After all, we understand that dealers can provide us with a steady flow of customers.

How do you rate the launch of the electronic MTPL policy?

—Frankly, expectations were more optimistic than reality. The fact is that only a small number of consumers are actually aware of the electronic policy. Indeed, today, the lion's share of sales in terms of the number of MTPL policies occurs in zones 5 and 6, where the level of digitalization still leaves much to be desired. Furthermore, high agent commissions remain a problem, harming the entire market. Therefore, in order to stimulate the mass transition to the use of electronic policies, it is necessary to disseminate information about them to the masses and work on reducing costs.

In your opinion, what factors will be key in the competition for customers in the coming years?

In Ukraine, there are essentially two markets. On the one hand, there is a huge market of uninsured clients, on the other, there is a market of existing clients, both legal entities and individuals. There, we are seeing serious competition among the TOP-20 insurance companies, where service and a customer-oriented approach are paramount. Yes, dumping will not completely disappear and will remain in CASCO and large property risks. But I think that over time, clients will be willing to pay a little more if they understand what they're paying for. Be it remote settlement of auto insurance claims, personalized service for voluntary health insurance, or an individual approach to property risk quotations. Therefore, success will definitely belong to those companies whose slogans are backed by real actions.

In other words, will competition shift to the service level?

Definitely. And the largest market players are investing in this. And the race for commissions and tariffs will end sooner or later. Moreover, an important task is cost reduction. After all, everyone has more or less the same loss ratio. And the price a company offers to a client depends on how effectively it can manage its expenses. Therefore, an emphasis on service and optimization, in my opinion, is a trend not only for 2018, but also for 2019. An insurance company's ability to operate profitably depends on the team's professionalism, its global market vision, and decisions aimed at reconfiguring internal processes, which ultimately ensures the achievement of specific results.

Source: Forenshurer

News companies

ALPHA Insurance