HDFC ERGO General Insurance Company: Building Milestones in Indian Insurance Industry

The Indian insurance sector has one of the largest insurance markets in the world. The insurance industry in India has grown exponentially over the last decade and it has a huge potentiality and several business opportunities in the near future. To accelerate the growth of insurance industry it is important to raise the level of insurance awareness in India. Lack of awareness regarding insurance is one of the major hurdles that companies face while penetrating the minds of people in terms of insurance. The most prominent insurance company, HDFC ERGO, has undertaken various initiatives for the growth of the insurance sector as well as to spread awareness among the customers about insurance from time to time. The company understands the insurance needs of its customers and provides them with customized insurance solutions tailored to their requirements.

HDFC ERGO General Insurance Company Limited is a joint venture of two powerful and renowned brands, the HDFC Group and Munich Re Group. HDFC Group is amongst the largest financial services Group in India with its pan India presence and market leading position across all financial services products. Munich Re Group is the largest reinsurer based in Germany and having a global presence for over 125 years. ERGO is an insurance company which is owned by Munich Re Group.  In 2008, HDFC entered into a joint venture with ERGO and since then it has been consistently achieving a profitable growth.

HDFC ERGO’s vision statement is “To be the most admired insurance company that enables the continued progress of customers by being responsive to their needs.”, guided by its values ‘SEED’ i.e., Sensitivity, Excellence, Ethics, and Dynamism to achieve its vision. HDFG ERGO has more than seven million loyal customers. The company has been certified with ISO certification for claim services, operations & services, policy issuance, customer servicing, risk & loss mitigation, and more.

Innovative and First-of-its-kind Products and Services

HDFC ERGO offers a comprehensive range of General Insurance products to its retail, corporate, and rural customers. In the retail segment, it offers several products such as Motor, Health, Travel, Home and Personal Accident Insurance. It offers customized products like Property, Marine, Liability Insurance and more in the corporate segment. In past one year, it has launched numerous innovative products like Cyber Insurance, Inherent Defects Policy, Solar Energy Shortfall Insurance Policy, Title Insurance Policy and Ticket Cancellations Insurance Policy. The company heavily invests in the digitalization of products and services, which sets it apart from other players in the market.

The company provides digital tools and apps to its clients for effective and prompt services which include Insurance Portfolio Organizer (IPO) App, the IPO App on the Apple Watch, DIA – AI Chatbot on Amazon Alexa, Google Assistant and the Company website, Motor Self-Inspection App, End-to-End (E2E) Motor Claims App, Overnight Vehicle Repair Service, the HDFC ERGO Community portal accessible at community.hdfcergo.com and more.

Glimpse of Some Major Achievements

In FY08 with total premium of INR 223 Cr. HDFC ERGO was ranked as the 8th largest private insurance company, it has grown significantly at a CAGR of 41% in a decade and in FY18 the Company has achieved tremendous premiums of INR. 7,401 Cr. and has become the third largest private insurer in India. Moreover, market share of the company has grown from 0.8% (FY08) to 4.9% (FY18).

In 2016, the company acquired Larsen & Toubro General Insurance Company and till date across life, health and non-life insurance segments, it is the first Indian insurer who has successfully done an acquisition in India. Furthermore, HDFC ERGO has been ranked ‘iAAA’ rating by ICRA that indicates its highest claim paying ability with highest safety levels.

The company has won many prestigious awards for quality customer services and significant contribution in the industry. The company has been awarded by ICAI for ‘Excellence in Financial Reporting’, one of the most valuable awards for four consecutive years. This indicates the highest level of governance and transparency in the company.

An Ardent Trailblazer

Ritesh Kumar is the Managing Director and CEO of the HDFC ERGO. Ritesh has more than 24 years of rich work experience in the Financial Services sphere, of which he has spent 14 years in the Insurance sector. Ritesh joined HDFC ERGO in the year 2008. He is a commerce graduate from Shriram College of Commerce, Delhi and holds an MBA degree from Faculty of Management Studies, Delhi.

Enhancing Insurance Awareness through Distinctive Programs

HDFC ERGO has launched India’s first HDFC ERGO Insurance Awareness Award Junior – Quiz in September 2016 in Mumbai as a learning initiative to educate school students about insurance. The awareness program through the quiz got immense success and the company extended it to five cities – Delhi, Mumbai, Kolkata, Chennai and Bengaluru to make it a national level competition in 2017. Moreover, Insurance experts from HDFC ERGO conducted townhalls in more than 160 schools and imparted basic insurance knowledge to over 33,000 students of 8th and 9thstandards. More cities like Ahmedabad, Hyderabad, Pune, and Ranchi have been also added to the third edition of the HDFC ERGO Insurance Awareness Award Junior– Quiz in 2018.

Apart from this, to educate farmers about the crop insurance schemes the Company has conducted several marketing campaigns & awareness programs with the help of central and state government in the rural India. The Company has received positive response through these initiatives and farmers have started insuring their crops under the insurance schemes. HDFC ERGO ventured into the crop insurance business with the implementation of the first Weather Based Crop Insurance Scheme (WBCIS) in 2009-10 and later under the Pradhan Mantri Fasal Bima Yojana (PMFBY). Today the Company covers Assam, Goa, Gujarat, Madhya Pradesh, Andhra Pradesh, Maharashtra, Karnataka, West Bengal, Odisha, Rajasthan, Chattisgarh and Uttarakhand under the government’s Crop Insurance schemes in the respective states.

Taking Electronic Services to Rural India

In February 2014, HDFC ERGO started Common Service Centre (CSC) platform, the access points for delivery of various electronic services to rural areas in India, in the states of Uttar Pradesh and Andhra Pradesh. Later, the states of Maharashtra, Punjab and Meghalaya too, were added and in August 2014 the company expanded CSC coverage to a pan-India level.

Today, CSC platform has over 10,000 service points actively recommending HDFC ERGO’s products. Since, CSCs are present in almost all the rural areas, it is easier for farmers to go to these centers and get the policy issued.

In July 2016, the company commenced soliciting insurance policies for motor third party liability insurance, Kisan Sarva Suraksha Kawach Insurance (Farmers’ Package Policy), Personal Accident Insurance and Standard Fire & Special Perils Insurance (Dwellings Only) through the CSC centres. HDFC ERGO is the largest contributor to Common Service Centre (CSC) channel, which is a strategic cornerstone of the National e-Governance Plan (NeGP) approved by Government of India.

Customer-Centric Approach

For HDFC ERGO the customer always comes first. It follows a customer centric approach and places the customer’s interests at the heart of its offerings. The Company develops new products based on customer needs and offers service suitability to the customers. Recently the Company has launched the Overnight Vehicle Repair Service for motor insurance customers, where the vehicle can be repaired overnight and delivered to the customer the next morning, so that the daily routine of the customer is not disrupted. Customer service, digitization processes, product development, product refinement, and product & service delivery are based on an ever-evolving understanding of the insurance needs of the diverse customer base – from large, institutional customers at one end to retail individual customers at the other.

Challenges in General Insurance Industry

Insurance is an old concept globally but the awareness levels in the Indian market continue to be low. The general insurance penetration to GDP is just 0.8% in India, while it is 1.8% for Asia and 2.8% at a global level. India is the second most populous country in the world and very small portion of total population opts for insurance. With the ever-increasing healthcare costs, only 32 million individuals, or under 3%, have opted for an individual health insurance cover as of March 2017. Owing to various efforts being undertaken by IRDAI and the players in the Indian insurance industry, the awareness is improving, but on a fairly low base. Also, it is important to build long term relationship along with securing trust in the minds of the consumers and it is one of the challenging areas in general insurance industries.

Strides for Better Future

HDFC ERGO is poised to continue to grow profitably going forward. The company believes that the acquisition of L&T General has helped it to achieve a balanced product and channel portfolio and the company shall continue its customer centric approach to further build on its success. There are many growth opportunities in the Indian insurance market and one of them is cyber risk. The company is focusing to provide innovative cyber insurance products/schemes in the near future.