A decisively forward looking and innovation driven company Green Delta Insurance Company Limited (GDIC) is one of the leading private non-life insurance companies in Bangladesh. GDIC was incorporated in December 14, 1985 as a public limited company and its operation started on January 1, 1986. Since then it has amassed more than Tk807 million with a credit rating of AAA and ST1, as the first Insurance Company in Bangladesh. Green Delta is also the first insurance company in Bangladesh to have equity partnership with International Finance Corporation (IFC) of World Bank Group.
We sat down with the Additional Managing Director and Company Secretary of Green Delta, Syed Moinuddin Ahmed to learn about the company’s technological adaptation, its vision for the future and how it is digitalizing insurance in Bangladesh. Here is the interview excerpt:
FINTECH: We want to explore few themes in the interview, including how technological disruption affected the insurance industry. But first, could you please tell us when and where your career started and how you got to this point?
SM Ahmed: Sure. I started my career in the banking sector. I joined AB Bank in 1999. After working there for a while I joined South East Bank as a management trainee in the first batch in 2000. I was there until March 2004. As a management trainee I went through an overall rotation, starting from the head office operation to branch operation. Before leaving I was posted at a branch in Old Dhaka. After that I joined Brac Bank, in the SME banking division. I was there up until 2009, for about five years. That was the period when the whole SME banking movement happened in Bangladesh, led by Brac Bank, and I was blessed to be a part of that. I worked in SME banking in various capacity. I worked in credit, in business development and at one point led what is called ‘small banking’. So, that’s about nine and half years of experience in banking, after which I joined Green Delta Insurance in July 2009 as DMD. I was in charge of two portfolios: company secretariat and the operations for the security subsidiary of Green Delta. Green Delta Insurance got the license for Green Delta Capital in 2010. I was then made the MD for Green Delta Capital merchant bank. At the same time, I was doing my company secretariat work. From 2010 to 2013 I was the MD.
In 2014 we started another subsidiary GD Assist, which was for the health care sector. I was made the MD of GD Assist and continue to hold that post to this day. The IT department had been added to my portfolio in 2013 and I was also put in charge of a process re-engineering work. I have been carrying out IT supervision since then, in addition to company secretariat, compliance and GD Assist.
FINTECH:What does ‘process reengineering’ entail exactly?
SM Ahmed: That’s a very important question. Process reengineering is a very vast area. Here, the process reengineering work I supervise for insurance is really in bits and pieces. There is no holistic approach as such. There are a few reasons for that. One of the reasons is that the insurance industry is going through a transformation phase. In the last few years the industry ran in a certain way, but the future is very exciting. The next ten years will be very exciting in terms innovation, development and overall magnitude. There will be a big change in the customers’ expectation. That is the forecast that we have.
So, going back to process engineering, we have divided it into two segments. The first part is to do with how to make the manual process efficient and how to fine tune it. The other part is to do with how we can replace that manual process through technology.
We truly started working on the technology at the end of 2015. Before that we focused on making the manual process more efficient. We worked on reshaping it, for instance, how to make cost per work more efficient.
FINTECH: Conventionally the customer management in the insurance industry is done manually. But the relationship management is slowly transforming into digital management. People now prefer doing things digitally, for their PC or mobile devices. Are you now able to deliver this digitally? If someone wants to take out an insurance, or the customer wants to get regular updates digitally, can they get that service with you?
SM Ahmed: Absolutely. In fact, I’m glad to say that Green Delta is the first insurance company that enabled customers to take out an insurance sitting at their home. You just go online, fill up the details required and make your payment. You will get an electronic copy of the policy as soon as the payment is made, and within 24 to 48 hours you will get the physical copy delivered to you. You don’t have to go anywhere for that. It is possible now.
A number of our products – travel insurance, motor insurance, a product for migrant labourers and a product for women named ‘Nibedita’ – are available online. We were the first one to get connected with all the banks. We enabled all Master and Visa cards, be it local or international. Customers are paying the premium from places like London for their relatives here. We are connected with bKash, and also currently working out partnership with UCB. So, our products on the retail line can be availed through digital platform, whether from PC or hand held device.
FINTECH: How to submit supporting documents when buying these products online?
SM Ahmed: You just have to upload scanned copies of your document and then it’s done.
FINTECH: So you have automated that process. What else you will automate or do you think you have achieved your goals?
SM Ahmed: No, not at all. We haven’t achieved our goal yet. When I took charge of the technology department in 2015 and I started working with the team, we started to talk about a strategy after a whole year’s work. That strategy was digital insurance. It actually does not involve any complicated tech usage. It is very simple. We want to enable the Bangladeshi people to buy insurance from home. And even in case of a claim the customer can avail sitting at his own home. Documents will be submitted online. People shouldn’t be reliant on getting help from a person to avail our services. That is the objective.
Initially we thought that we will make the digital insurance available for Green Delta only. But later on we thought that having it for just Green Delta will not serve the whole customer base. We need all other players to join this movement.
FINTECH: By other player you mean other insurance companies?
SM Ahmed: Other insurance companies, yes. Otherwise we will not get the real benefit of technology. If we do it together then it will help the whole industry. The most important thing in this industry is the image and trust. So, we started working toward that and in 2016 we created a three-year plan. The first phase of this plan was very straight forward. We decided to beta test the products that I just mentioned, to see if that was possible staying within the existing rules and regulations. We completed the first phase very smoothly. The next phase is we have a few challenges. Two challenges in particular are particularly relevant for making the services online. One is e-signature and the second one is stamping. The e-signature does not have regulatory clearances as of yet. A random person can’t acquire a digital signature. They have to apply; they have to pay. So, we have been working in a project regarding this with the ICT Division, where we are pushing for initiating a project through which e-signature can be be given in mass numbers.
FINTECH: How far this has progressed?
SM Ahmed: Quite a bit really.
FINTECH: But assigning digital signature to everyone will be really difficult though, wouldn’t it?
SM Ahmed: True, it’s not possible. We are working on a workaround. The workaround will essentially be like giving our customers a verification method when they visit to our site. It’s going to be simple: either through your mobile or through your NID. If we can link up with these two then we can provide a verification for those and issue a temporary digital signature, once they register.
We will have the complete record that the customer applied for a digital signature and one had been temporarily allocated to them. It will be valid until you fill up the application form and it will dissipate as soon as the application is done. So, we are working on that process. It’s a little complicated actually. One of the challenges here is that it has to be cost effective. You can’t ask the client to pay for it. Otherwise, the digital option will not be lucrative. Hopefully, this will come to fruition soon. Because validation is very important for us. We also need to do cost-benefit analyses as to how much we can practically invest.
Another challenge is that according to our insurance laws or the Stamp Act, whenever a policy is issued a revenue stamp must be attached to it. This isn’t possible electronically. So, that payment has to move online. Until that happens it’s very difficult to be 100 percent digital.
So, with these two challenges in mind we have created a process, where you get an electronic copy of the policy immediately, but the physical copy will reach you after a day or two days.
FINTECH: So, you can initiate the process online and then for completing it customer will have to visit you.
SM Ahmed: Exactly. 90 percent of the process will be done automatically, but for the 10 percent the policy will be sent to you. You still don’t have to come visit us.
FINTECH: Generally, the insurance industry is very agent driven. It is the norm that insurance agents go to people. Have you introduced any digital process in managing these sales agents?
SM Ahmed: We are working on that. It’s in our second phase. We are actually trying to make it less reliant or non-reliant on agents. The business has become very person-centric or personal relation driven. We are looking to make it institution driven.
That’s why we want to promote the digital. But the challenge of incorporating the agents into the digital system is to manage their commission. So, we will soon give a proposal to the IDR (Insurance Development & Regulatory Authority) for rewarding the customer with the benefit that the agent would have received. There is an obvious incentive for the client here. It will be a beneficial for both sides. So, we are working on that. If that works out tracking the agents will not be necessary in the first place.
FINTECH: The common question that is raised in such arrangements, will the digital transformation cause loss of jobs?
SM Ahmed: Yes, I can’t say that is not going to happen. There is a chance. Because that is happening worldwide. Industrialisation created joblessness. There will be some job losses. But what will happen in the process is that agents will become more efficient, because they will be equipped with handheld devices then. They will be able to provide you the service immediately, whereas now an agent is getting a written form from you first, then after a few days he is delivering you papers, then probably going to you for payment and coming back again for receipts and so on.
So, people adapting with the technology will be able to get more business, helping the company as well as increasing their own commission. It will create business environment that will be more compliance driven, which is very important for our financial industry.
FINTECH: Insurance companies, and banks as well, are gathering a lot of data from customers in the course of their business. They are also retaining these data. Is Big Data analysis being utilised in the industry? Are the companies trying to use that data analytics to create more clients? Specifically, is Green Delta doing this?
SM Ahmed: Yes, Green Delta is doing it. The final stage of the digital insurance project is data analytics or what is called Big Data. The reason for keeping it in the last stage is twofold. One is that just like we have to bring in development on the technology platform side before we bring in the data analytics, at the same time we will have to prepare the resource that will do the data analysis. We have to prepare the human capital to that extent.
So, Green Delta has been working in a very focused way in both aspects. I would like to share with you, by 2019 Green Delta will be moving into the international core insurance platform, which is recognised internationally. We are going to move into that platform. All the processes will be tracked in a software then. So, we are doing the technological enhancement. In the process of doing that, we are investing a lot on the hardware side. We are doing that readiness also. Unless we don’t have the hardware and network readiness we can’t have software readiness. We are doing that and by 2019 we should be going live with the international level core software, insurance core software that is.
At the same time, we have identified a few resources in the MIS department and we are transforming them to be a data analytics for the future. We are taking them through a rigorous training, development, hands on, workshop process for the next one year, so that once the software is there in 2019, people are also ready for the data mining and data analytics. One thing we have already completed – perhaps it should have been kept for later, but we have done it earlier, and we are going through ‘learning by doing’ – that is we have already taken international analytics software, which is SAS, which many banks wouldn’t probably brave venturing into. We have already taken it. In our first phase, approximately 15 critical MIS report were done in a short time which conventionally would take 15 to 20 days to prepare. The next phase is how to incorporate more customized reports. So, by 2019 Green Delta Insurance will be fully digital insurance ready company in the country. That’s our goal and objective.
FINTECH: Thanks very much for speaking to us.
SM Ahmed: Thanks for talking to me.