Birla Sun Life moves to cluster method to get better sales, higher persistency

Birla Sun Life Insurance has moved to a cluster methodology to look at common challenges faced across the country and thereby help design solutions for these. The private insurer has also set up an innovation lab to design specific solutions for these clusters and also identify such potential clusters.

Pankaj Razdan, chief executive officer, said, “We are now trying to do things differently for financial services. We realised that the trust in buying these products was going down. We started believing there has to be some core reason for this and began to look at newer methods to deal with it.”

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The company found there was poor financial literacy in the country and a need for methods to empower customers. The thought was that if trust had to be built, it was necessary to understand the consumer.

Apart from this, the insurer felt the need to solve the problem of customer scarcity. It was then that the innovation lab was set up with 10-15 young people from across functions in the organisation. This led to development of a cluster methodology, where they identified common problems of a group of people. Razdan said instead of going from one to one, the idea was to get one lead and influence large pools of people.

Several case studies were then done by identifying clusters across the country. For instance, Razdan said they did research on protection awareness at Naya Bazaar in Siliguri, West Bengal. This place had 15,000 shops, very close to each other. Protection awareness was zero and risks from incidents like fire was high. To engage this community, the insurer organised several workshops to help people understand what were the risks they were prone to.

“In one effort we got access to all the people. The idea was to engage a community and understand their common challenges. The team then works on this,” he said. Razdan also said they were looking to have a database of 30,000-40,000 clusters this year and already had a database of about 16,000.

They also created a counselling tool. The idea here was not to have products but solutions. “From the beginning of this initiative, we were clear that sales was not the motive but to get people to understand their needs. Hence, we would not push our products and would even suggest products of competitors if it suited their needs better. This helped us win the customer’s trust,” Razdan said.

They created a solution for doctors as well, to help them have protection and offered protection counselling to look at their needs.  Similarly, a wealth creation solution was designed for a small and medium enterprise’s employees.

A new system for measuring performance was designed where capacity, productivity and sustainable were looked at. Razdan said sustainability was 40 per cent of the team’s key result area (KRA). If there was a complaint against a sale, there was a negative marking. Similarly, they also measured renewal premiums to improve persistency.

“While we have cut down on 30 per cent branches and people in the last one to one-and-a-half years, this quarter we will still see about 25 per cent growth in business,” he said.  Razdan said persistency was improving and had gone up six-seven per cent this year in the 13th month. Similarly, they had seen a drop in surrenders and he said after about three-four years, the renewals premiums had done better than the target.

In the innovation lab, Birla Sun Life also takes help from a design company to help them come up with better solutions. Peer learning and case studies are being used to instil this new methodology of sale among the sales force right from sales head to regional managers, zonal managers, branch managers and agents.

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