Kathmandu. The Deputy Chief Executive Officer (DCEO) of Citizen Life Insurance is Deep Bahadur BC. He has been associated with Citizen Life since 2017. BC is also the Company Secretary of Citizen Life. DC, who holds a master’s degree from Asian E University, is a Chartered Accountant from ICANN. BC, who has accumulated two decades of experience in auditing, accounting, financial management, strategic business planning, was previously associated with Prime Life Insurance. He has received training in business management, corporate governance, actuarial science, insurance, taxonomism, ALM, IFRS, IAS, NAS, risk management, etc. in the country and abroad. Summary of the conversation with the same DCEO BC on ##Insurance Talk##:
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## ##The surrender of life insurance companies has increased significantly. Business has not been able to grow. How much stress has been felt in terms of the company’s business and financial health?
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## It is not even in the situation that we are thinking. Surrender is increasing in the data. New business has not been able to grow. There are reports that surrender is more than new business. However, due to the slowdown in the overall economic situation of the country and the decrease in the spending capacity of each person, the insured is using the amount in the insurance as a last resort. Suppose, today I have to use it even if I don’t have food. It is no longer a situation to wait for it to protect me, manage the risk or see if it will benefit me tomorrow.
The economic situation is there. Apart from that, what other reasons are the surrenders increasing?
There are many reasons for that. The first is the impact of the slowdown in the economy. If I am buying a policy today, I buy it by estimating how much I can pay in the future. Therefore, the first reason for the surrender situation is that the economic slowdown does not meet that expectation. Along with this, in some cases, when buying a policy today, it is said that I can pay this much, but if for some reason I cannot earn as much as I expected, I have to surrender. Similarly, I did not understand the product, the agent who came to explain it to me could not explain it, or even if the agent explained it, I could not understand it. It may also be that I did not feel that this product is for me today. In addition, surrenders are also seen with the thought of going there when another better policy comes out than the one I bought now. Sometimes, some surrenders are found even when the agent cannot explain it.
Do you want to see so many things during underwriting? Generally speaking, it seems that companies send agents and collect premiums, right?
It may be as you said. However, the fact is that when underwriting a proposal, it is not only about whether the premium is received or not or how much the premium is received. Apart from this, not only the risk of the insured but also other things are considered.
The structure in which you give commission to the insured and the agent is a little high at first, then it gradually decreases. That is why you are discouraged. If you amend it and keep generating a little money until the last year’s premium is paid, then the agent would also be motivated to collect money, right?
Some policy-related matters should be taken initiative. The Insurance Regulations are still in the process of being implemented. The Insurance Act, 2079 BS has been passed and is yet to be printed and distributed to you and us, including the general public. When the Act of 2049 came into force, some amendments were made to such provisions. Then, when the current Act came into force, the Act was also passed after much discussion. Some of them have been made. For example, if the policy term is more than 15 years, then the agent gets 25 percent commission for the first year, 15 percent for the second year, and 5 percent for the next 8 years. For us, a similar practice seems to be taking place in countries such as the South Asian market, Bangladesh, India, etc.
‘After-sales service’ plays a very important role in the trade of goods and services. How do you connect with the company, agent, and insured in insurance?
Agents are getting connected. The service is provided on the basis that they will get a lot of commission in the first year. The second year, a good amount of 15 percent comes. After that, it comes to 5 percent. That is why agents are getting involved in that way. Now, when talking about the company, if the agent can be made professional, it means that the insured can be satisfied. In addition, there is also a situation where the insured can recommend it. There is a situation where the insured’s family, friends, and relatives can also get involved. Not only that, if someone took a policy 5 years ago, they may also buy another policy today. That is why agents are involved in it. The company is also involved in it on its behalf. If we talk about our company, the company’s call center is available 24 hours a day. Such call centers are also in the provincial offices.
Are you not paying money, are you calling just to pay quickly or are you insured, do you also call to ask how the situation is?
There are various stages in this. If your insurance proposal is approved today, an SMS will be sent first. It will inform you that your proposal has been approved. Then, after payment, an SMS will be sent saying that the policy of this number has started, which will also tell you how much its premium is. A regular call will be made. However, we are not able to call all policy holders right now. However, those with a premium of 5 lakhs or more will get a regular phone call. This phone call will be made at the time of buying the policy. In that phone call, everything about the policy is discussed. Then a renewal call and SMS are sent. An SMS is sent 30 days before, saying that renewal is required on this date. Then the phone call is made. If there is any concession or scheme, information is given about it.
But, after 5 months of paying the premium, why not call the insured and ask him how he is doing?
That has not been done, which needs to be done.
How does an insured choose companies before buying an insurance policy? Should you choose a company based on factors such as an old company, a lot of premiums, whether this person is the CEO, whether this or that investor is there?
That also depends on the customer’s wishes. Some are also giving priority to bonuses. The question remains as to what to emphasize to the citizen.
Is your product the same for all companies?
There is not much difference in the product. The product looks the same, but there is definitely something different about it.
What are you selling that you think is better than others for this or that reason?
There is a difference, right?
Even the insured may not understand that?
But, it is comparatively different. For example, branch managers sometimes say that Citizens has done very well in producing professional agents or agents. We not only award them or make them happy, but also transfer knowledge.
You bring in motivational speakers to motivate agents. But, you accuse them of not explaining policies or products, right?
The international or national level trainers brought by Citizens Life are of different varieties. They not only provide motivation but also provide information on core insurance. The agents participate in it with great enthusiasm and share their experiences. They are learning how to sell, how to deal with questions.
If you have to choose among the products your company is selling, which one would you choose?
All are unique products. We do not have a flood of many products. There are only 5-6 products for savings. There is only one product for whole life. There is one for endowment for adults and one for children. These days, we are working only on whole life. Not only that, but similar products are being prepared to come in the pipeline this year. Now we have come up with Universal Life.
You cheat on bonuses. You say you will give from Rs. 18 to Rs. 85.
There is no cheating in the name of bonus.
How did that variation come about?
The reason for the variation is that we have started testing the profit of the product since 2017. The Insurance Authority has only started looking at how much profit it can give when approving the proposal a few years ago. When testing a product, the policy term itself, for example, the return on a 5-year term policy of Rs 1 lakh, is different from the return on a 20-year term policy of Rs 1 lakh. This is related to the overall economic situation.
