Tasked with the job of driving customer strategies, marketing stategies and delivering them in the market across ten countries in Asia, Sanjeev Kapur took up the position of MetLife’s chief marketing officer for Asia last year. MetLife, one of the leading providers of insurance globally, has been operating in Bangladesh since 2010 and emerged as the largest life insurer in the country. With a formidable workforce of 16,000 field agents and employees, the company seems poised to continue its success in Bangladesh’s emerging economy.
Visiting Dhaka last month, Kapur sat down with Fintech to talk about MetLife’s operation in the region, in this country, digitization, future plans and the insurance sector in general – among a host of other related topics. An excerpt from the conversation here captures the interesting insights Sanjeev Kapur shared with Fintech at the company’s Bangladesh headquaters in Motijheel.
FINTECH: How big is the insurance business in the Asia region and what is your market share?
Firstly, we have a pretty large business in Asia and in terms of just financials, our revenues are now around 11 billion dollars across Asia. So, we have a very large business and around 26 percent of our earnings globally come from Asia. So, that’s how important Asia is as a region to MetLife. And it is hard to give you one number of market share because we have presence in 10 countries, and that one number won’t necessarily make as much sense.
When it comes to Bangladesh particularly, I think I can quote the market share number. We are north of 30 percent market share and we are leaders by far, compared to even the second closest private or public insurance in the market.
And the interesting thing is that I think MetLife Bangladesh operations is what I call the jewel in the crown of MetLife because not only does it have a leading position, it is also growing very rapidly in terms of its market share, even though we are already a leader by a wide margin in the market.
FINTECH: What kind of advantages you have because of your presence in the global market, in other words for being a big international company?
Because of our presence in Asia and outside of Asia, we had access to both the best practices when it comes to developing the right solutions for our customers, we had access to the innovation that is happening globally – particularly when it comes to the use of technology – and then we can bring that innovation here, as well as the best sales practices, the processes that we are learning globally and then make it available for our company in Bangladesh.
FINTECH: In Bangladesh there is quite a negative perception about the insurance sector, mainly because of issues related to claim, among other things. How do you tackle that?
I have to admit that I have noticed that insurance as an industry has a bit of a reputational dent across several markets in Asia and may be the reputational dent happened at different points of time during the sector’s evolution. And if you really go into the details of that, you will realize that one of the biggest reasons why there is a trust deficit is that there have been cases of a lot of miss-selling that happened in the industry where either the customers did not really understand what they were buying or if they understood what they were buying but actually the policy did not solve the need for which they bought the policy.
And a good reflection of that is what is called a lapse rate in the insurance industry which basically is what percentage of customers actually give back their policy or stop paying premiums in the policy within the first 12 months of purchasing the policy. And we didn’t know that this problem is particularly acute in Bangladesh, and when you compare Bangladesh lapse rates which are published by the regulator, you have rates in some of the private insurance companies as high as 60 to 80 percent which is very high when you compare it with a market like India where the lapse rates are closer to 10-15 percent.
And if you go to the developed markets, it goes down really low to single digit numbers. In MetLife, as the market leaders we have taken this very seriously and you can check the websites of the regulator and see that our lapse rates are significantly lower than some of the similar players in the industry, you know about 75 to 80 percent lower than some of the private insurers. And the reason why this is the case is that as a company we take this very seriously. We make sure there are very good sales practices as well as good training that we provide to our financial associates. Another very interesting way of dealing with this issue is to provide advocacy to customers, you know as the leader in the industry we see it as our role to create customer awareness about the importance of buying the right products.
So we have this very interesting initiative, which is an advocacy that started on social media and Facebook, it is like an advocacy platform that we created which is purely for the purpose of telling customers how protection is really important and how they have to be really careful when they are buying products for themselves and for their family. Our team here has done a great job, they have a community of 150,000 people, we are actually on that community which is the largest of its kind I believe in the country from a social initiative perspective.
FINTECH: There is certain mistrust associated with the agent model, at least in the customer’s mind in this country. So do you think that the agent model will change with tech disruptions, and how soon it might change if it does?
Let me start by saying at MetLife we are preparing ourselves for the next decade where we know that digital is going to be the primary mode of communication and commerce. You have seen that there is rapid growth happening in e-commerce, rapid growth happening of digital payments across the region. And what happened is that this basically follows a maturity curve of the customer and we have seen that the customers first tend to become comfortable in commerce with regards to online commerce, starting with e-commerce companies and then the payment systems get established. And typically the financial services tend to have a lag of about a few years and it may vary by the country behind the e-commerce trend.
Now, here in Bangladesh we were looking at some statistics that it is growing very rapidly. If the figures we have seen are correcnt then the recent statistics show that there are as many as 200,000 orders that are being dispatched everyday in Bangladesh. It is clearly giving you a glimpse that the market is now more mature and consumers now are getting more ready for online distribution. So, given this trend in Bangladesh and across Asia, we are taking a more calibrated approach and if I may say being a more test-and-learn approach of arriving at the right model of online distribution.
Having said that, I would still say that I believe that our people on the ground, who we call the financial associates, will keep playing a critical role in the future. This is because if you look at our industry in markets like Bangladesh, you have 0.5 percent penetration. There is a need to create awareness about the category, the need of protection and that’s where the associates play a crucial role.
If I look at the future, I see an omni-channel future where growth of these channels will complement each other and potentially the customer will then decide what is their preference, are they gonna start online or they are gonna start with financial associates, but we should provide that choice to the customer.
FINTECH: Do you approach the Bangladesh market by trying to replicate what you have successfully done in other countries, in terms of how you deploy the technology, the structure related to technology or do you try to tailor Bangladesh’s specific situation?
The use of technology and how we operate is going to go through an evolution, so one part of the answer is yes. By virtue of being a global player we have access to the best technology stack globally and we want to give every country where we operate the advantage of that stack. We are providing solutions like automation tools and technology for the benefit of our local companies.
But having said that, the next stage of evolution that we are now getting ready for and we have started making strides in that direction, is customizing some of these solutions to make them work for individual countries, but more importantly as this matures you will have plugged yourself into the digital ecosystem of every country.
A good example of that is the messenger service, we trying now to integrate ourselves into the dominant messenger networks in every country. Now, if you go to China it is WeChat, you go to Korea it is Kakao, it is Line in Japan, it may be Facebook or Messenger or something else in Bangladesh. So, eventually we want to create a technological capability where we have open architecture and ability to plug into the unique ecosystem of every country because our intention is to serve our customers where they prefer to spend their dominant time and if it happens to be a different platform in the country then that’s what we will have to do.
FINTECH: So in general what’s ahead for MetLife in terms of marketing or as a company as a whole?
The first pivot point we are trying to do is that traditionally as a company we have been a sales and product oriented company. We are going through this transformation where the core of the transformation we have, the agenda is to become much more customer centric and use technology to make it easier to do business with us. And what lies ahead is that, as a part of this customer centricity we are trying to have this customer strategy of giving the right solutions to the right customers. And we want to make this pivot from not just providing products to people but provide solutions to people.
The difference between the two is that once I understand what is behind the underlying need that you have, then I can serve it through products, I can serve it through services and I can serve it through experiences.
This is a very big transformation period for us in terms of how do we move from being product led to being customer led and be customer solution led in the market. So that’s going to be one big change you will see. The second is the use of technology and we want to make it fast, easy and simple for customers to do business with us when it comes to acquisition or when it comes to servicing customers online. And you would see many initiatives we have launched, for example the mobile based platform we launched through our associates last year, we did a pilot with around 500 of our associates to give a very intuitive sales experience to our customers. That was very well received, we got some great feedback and now we have expanded that to 2,500 financial associates in the market.
And this is just one of the examples of many things that we intend to do in the coming months to really use technology to drive experience. The last thing I will say is that we want to re-imagine the role that a brand like us can play in the life of a customer. If you see insurance in general across everywhere, almost every brand is trying to sell insurance with an attempt to give protection to people when they run into adversity, you have an accident or you have a serious illness. So that’s when the brand comes in and offers financial protection. But what if we can think about a brand to be somebody who just not provides protection to people when they have an adversity but we can actually prevent them to get into an adversity. By being that we can play a much more powerful role in the life of a customer and we can add value to them on an everyday basis, not just once in 10 or 15 years during the duration of the policy. So, that I think is a big shift we want to make and that’s when you go beyond products and start adding value to their daily lives.