Prashant Paramhans(Host): Hey, so we have “Karin Zulkarnaen”, the Chief marketing officer at “Allianz”, Indonesia and Karin, welcome to this podcast series at Netcore and in our effort to bring knowledge from industry leaders like you to the individuals within the industries and across Industries and also to people within Indonesia and outside Indonesia, to learn from your understanding your experience being the industry leader that how is it moving as per your understanding? What all things you have been indicating and possibly it may give a perspective to the people across that they might not have to panic and then things are pretty much structured towards getting back on track.
Karin: Thanks Prashant for having me. I’ll be happy to talk about what I feel about the current state of the market and the change in our customer behaviour. I’ve been working from home for two months now and I’ve been having a few discussions with different marketers from different industries as well as have a roundtable industry discussion. So being we all agreed that the customer behaviour has changed since the pandemic and with people staying at home and by now, it’s two months stay at home, learning from home. Naturally, some behaviours change. We watch more TV, we become more active on social media, some people are becoming more active searching for information about covid prevention and in general, people are becoming more health-conscious. The way families making decisions about the purchase have changed too. There were some reports done by KG media, composite cigar Media Group, that ladies make more decisions these days. They become the teachers for the children. They need to make decisions about how to buy things for the household. The fact that we can’t leave the home so online shopping has increased. So a lot of products and service providers have to adapt to the way we interact with our consumers and customers and the way we do our transactions. From Allianz, about 95% of our staff work from home. So in the beginning of the first few weeks, I must say and must admit that it was not easy for us to adapt to picking up the phone for colleagues and calling the centre. They have to pick up calls from home. We need to answer the queries and we need to do a lot of ordination, imaging, we need to create a product and we continue with our product development from home. So from the living room to the bedroom, we continue to create all this Innovation and services for our customers. It was not easy in the first few weeks of my stay but now we get used to it.
Prashant: Certainly, I think women leaders is in a specific, they have been actually making a lot of impacts and they have been very successful in terms of managing this pandemic and you talk about the some of the leaders had posted the sometime back on LinkedIn and you talk about the chancellor of Germany or you talk about the prime minister of New Zealand or you talk about some of the ladies like prime minister of Denmark. The way they acted in terms of the pandemic overall. They will pretty much be far ahead in terms of taking proactive actions and they could really manage it. Well, they manage the people they manage the movements, they will still empathetic and in their communication and they ensured that they are the least impacted and reality today after few months down the line is that they safeguarded their people so that good kudos to that women leadership who they acted before hand as early as some of those leaders acted around the first week of March or something like that. Some of them around mid-February, they started acting so I think certainly that women leadership has taken a Forefront in terms of fighting these situations across the country level or the leadership level or within the industry for that metal bead insurance as well.
Karin: I’m not sure what this gender is but certainly knowing what people are after and once we give it to them what they’re looking for. It certainly helps like in Indonesia nine out of ten people are looking for information about covid and they were wondering whether their insurance policy, for example, first of it so very simply if we knew that this is the information that people are looking for from their insurance company. We need to quickly communicate this to the public so we did exactly that. So at the end of January even before the diverse case was announced by President Joko Widodo. We have made that announcement that our insurance products both live and helps cover covid, so I think that gives reassurance to our customers, our agents, our business partners that in the moment of uncertainty like this, at least they know that they are covered, they’re protected, because what people are worried is not only their health but also their Financial State and that is an important fact to know that about 78% of Indonesians and worried about the financials. Now, we are starting to see a bigger impact that some of the prospective owners no longer pay the Indonesians. Even the government officers are like the cop in this bonus that the bonus will be paid through instalments. All these things are quite worrying for most people. So what we need to communicate is how we are always there for our customers. Not only do we cover this covid condition, but we in fact give additional benefits to our customers. So we are actually being now, an additional 50% of their insurance amount in case of covid death and these are given without extra charge to our customer. We are also giving different kinds of services such as knowing how worried people are going to meet their doctors, going to the hospitals. They’re trying to postpone all these doctor consultations whenever possible. They are worried about going to have these contacts at the hospital. So what we do in Allianz is that we work with our business partner to provide these online doctor consultations for free for our customers. So whenever they have doubts or questions about their health experiencing whatever symptoms can be, they can just pick up the phone from their home from the comfort of their home and then have this sorted out with their doctors. We can even deliver the medications that are needed to pick it up from the nearest pharmacy and we send them to their homes. So we believe this kind of convenience is what our customers are looking for these days.
Prashant: I think this is an amazing piece of work, which is being done certainly and it would be help helpful except for me also in some of the cases like say I was having some irritation with my eyes and I decided that okay, but let me continue with it with some Icing and things like that rather than getting to be hospital and unfolds iron unwillingly trying to get in contact with something unfortunate. So I think that certainly this is an amazing piece of initiative and it will create a massive positive impact on the people in Indonesia. So Karin now, I would want to know from you say for a situation that it did the industry perception externally is that insurance is one segment, which is positively impacted in terms of say Revenue. So is it reality or is it something different?
Karin: We just had the numbers from the industry release last week. So this question comes at the perfect time. It’s interesting to see that the industry has been actively impacted. In fact, the true grocery pan premium in the first quarter was shown by the team. So I think it’s a combination of a few things. First of all, maybe it’s a slow start generally in the market and secondly is also we are relying a lot on face-to-face interaction. In Allianz, we have a distribution channel. So we have the second-largest agency Network. We have a few better Partners. We have online distribution and it’s interesting to see that in the first three months of this year, all of the channels have grown. So in total our couple groceries and premiums grow very well. I was in fact rule 38 percent despite the slow market growth. So it was very encouraging for us. But we are aware that with this condition that we need to have physical distance, the sales may slow down in the next few months. So, we quickly need to review our plans right and reprioritize that strategy. So how we see things in Allianz is that certain channels that do not need or do not require face-to-face Channel. We put a lot of support into the channel, more campaigns to be done for the online Channel, telemarketing channel. Meanwhile, we are in discussion with the regulation, with the regulator on Duty on whether the regulations may be shifted in terms of face-to-face cells for unit-linked products. Our industry is very regulated. So we are now in discussion. We are proposing to our regulator whether that regulation has been relaxed given the situation right now.
Prashant: Right. So, Karin, there is another situation to it while you correctly mentioned that the basis on the industry reports. It is certainly getting into a negative zone in terms of the revenue and the way it has dipped and certainly there would be certain contribution because a lot of people have been laid off, some of the people might have lost some part of or some percentage of the salary for a certain period of time but certainly, one thing which comes very app that this pandemic has also brought us in a scenario of for people in Indonesia or maybe across the world, the importance of insurance. So considering what I could read of some of the industry reports in Indonesia only 1.7% of people are insured with certain types of policies from any of the companies. So how do you see this particular pandemic which will do a massive mind shift change towards insurance policy buying from the people? So how do you see this is going to give growth to the overall industry and to Allianz as well and what is that number that you expect by the end of 2021, this 1.7% is going to be what would be that number by 2021 December?
Karin: Okay. I think you are spot on Prashant that awareness about insurance has increased during this under me. So we use this opportunity to educate the people. We conduct many virtual sessions with the public with various communities about what insurance is and how we can help their financials to protect their family and the demand for insurance, especially health insurance, has increased significantly. That’s why I think we’re seeing that in the first quarter of this year, the numbers reflect that need. So I think your point earlier on how we market our products even though many people are faced with financial issues or even less income for many families. We have a few things going on right now. We have new products that are designed for mass market and emerging consumers and the most recent products we launched last week were in the Gojek app, in order to be sure we have two products, they’re not alone. So we have health insurance, very affordable as well as gadget insurance from Allianz. We believe that while we are staying at home these two are the two things that matter to us: our own health as well as the gadget because we are someone like staying at home. Maybe watching the news from our mobile phones, playing games through our laptop. So gadgets of course are very important to us to get us going right at home. So these are the two products that we released. We also have various Other products that we continue to mark up like the online products we have as well as creating new products for our agency and our bank insurance. So from us, the way we choose our products or The segment remains the same, but the way we let’s say our proposition we highlight certain things that are more relevant today like health insurance. We also work on how we can process certain products of our existing customers because finding new customers meeting up phase two ways is very much restricted these days. So we rely a lot on our customer loyalty and our customer retention also as part of our growth strategy.
Prashant: Great. So considering Karin that the safety is not only with the customers, but there is safety when it comes to the way the policies used to get sold and to be delivered to the masses, to the users and customers now. Now, how do you plan considering that the massive amount of engagement used to be done earlier with the agency and agents who they use to reach the last mile across the geography? So now considering that of course there will be a certain percentage where it will be coming from marketplaces or any other that you plan to add active later points in time, how are you still going to take care of agents? What are the ways and means in which they will try to adapt to digital technology and how will it impact in terms of maintaining the engagement and retention challenges that are expected to be faced?
Karin: Yeah, we have been unfortunate that digital by default has been our core strategy for the past five years. I must say we’ve been developing various digital Services, digital part points that currently now it becomes more handy. Now in times like this when we come to meet with the customer our customer service has to be closed, all transactions shifted now to all these Digital Services that we have prepared. For agents, we have these two little Allianz discoveries where agents can create the code for the customer, agents can submit the application online directly and up to certain limits depending on the size of the policy. Life insurance is Perfection. We can issue the policy immediately within five minutes. So these are basically becoming even more important these days than we have ever imagined in the past. In the past, it was about options where customers can get things done faster, a lot more convenient, but now it has become key to survival. So I think companies that do not have these tools that we would see a lot of problems right picking up their business volumes. So I think now customer experience has to be omnichannel. I must say right in the past. It was a luxury to be able to go over this omnichannel service, but now I think more and more are shifting online. So I don’t think the shift will end during the pandemic even after covid is over. I think that someone would appreciate doing things faster and a lot more conveniently.
Prashant: Right. So another thing which I would want to learn from you is it likes a lot of companies across different geographies like India for that matter they have adapted some personalization in their campaigns and some of those things and then they’re trying to personalize basis on the rules and there are certain personalization which is happening based on artificial intelligence and machine learning. So is that something that is also on plan for Allianz to implement? So for example, if I say somebody who is coming online, let’s say if someone who is coming from Surabaya on your website and they might be showcased the kind of a product which may not be very much related to the critical Illness, but there will be some other different type of products considering that they are already living a healthy lifestyle and then there are some other situations like say if there is the high time pollution in Jakarta, so somebody who is logging in from south Jakarta, they should be showcased some plan like critical illness related to cancer or something like that. Is it something that you have any plan to deploy or have you already deployed it?
Karin: We have done it to some extent, not in terms of geography segmentation like you mentioned earlier, but for us mainly on age groups and the product ownership our customers have. So we use Predictive Analytics, we use data science to design specific offers or customers. I mentioned earlier that it becomes even more important now that we maintain our existing customers, so we create various offers for customers to come up with or to purchase different products that we came up with for example last summer that only have life insurance. We give them an offer to also take on health insurance because now heath is basically the product that is being sought after. So we come up with a special offer, simplified process or the customer just needs to click basically on this email that we sent to them. They don’t need to fill in any more forms than the next billing when we send out to them already reflecting the new Premium and that you have coverage for them. So we do a reverse underwriting if you want to call it. In the past, customers need to fill in the form and then we underwrite the risk. Now we do the other way around, we choose with from our list of customers who are the lower risk and how much risk and we give to this customer how much protection are we willing to give this customers and we design those offers to the customer or the customer simply just need to say whether yes or no as simple as that.
Prashant: Awesome. So, you’re reducing the amount of effort with which you usually have to be taken by the customers and trying to give comfort and it is being personalized at the same time. I think that’s right. Yeah, so I think all of us like to say we would want to say for example I will give you like say any of the Indonesian want the credit card, but when you present the form they are afraid of taking that much effort to fill in the details. So I think you are reducing the in policy term if you’re reducing an impact on the policy side of it. It’s like I have a personal experience that I have done with say six to seven policies back in India, but the problem is that if I go for another insurance policy with the same company, I have to refill all over again. I love to give every single damn detail which is required.
Karin: I know, it’s a pain, isn’t it? We hate filling up forms.
Prashant: Correct. So if somehow you have taken it already as an initiative to track it down in terms of the effort and already matching it with the database which you already have, I think one of the appreciable efforts which Allianz has taken.
Karin: That’s exactly right. We know what our customer pain points are. We all hate filling up long forms and for our existing customers, we already know who you are. We know whether you have made claims recently, We know how much protection you have. We know your income and we know how much protection you should be having with your income. So we know those are protection gaps that your family is exposed to so we’re trying to provide the solutions to the customer in an easy manner, just click on the email that we sent you and you don’t need to fill in any forms. Basically, you are immediately pre-approved for the increase in the protection. So we hope our customers appreciate this opportunity to refuel their insurance policy.
Prashant: Yeah. That’s where the technology comes into play and I certainly want Allianz as a brand of bringing this centralized technology across, so that certainly is going to help in terms of reducing that and it will reduce the turnaround time to onboard the customer.
Karin: Exactly. Yeah, technology has to help us and not just to achieve productivity in the back office for example as I said we know who these customers are? Why do we ask them to fill in a lot of forms? We already know who they are, right. So it speeds up our plan around time. Let’s say right for changes in the policy documents. Secondly customers will appreciate it because we take the pain away, make things easy for them and agents would appreciate this because all these additional premiums count as their production. So it’s not like agents are not doing anything. We ask them to also contact the customer as we begin to send out these emails. So we are hoping to increase this touch point with the customer, not just by email but agents would also call the customer at the same time and remind the customer again about this special offer for them.
Prashant: Great. I think about now that post covid scenario and then there would be a race within the industry itself because one side is the negative impact and the other side is the golden future for the insurance industry at the first go and the second is that of course that pretty much the scale on the society side of it that will be helpful to take care of not only the pandemic kind of scenario, but any form for that matter any kind of scenario which people face and then market and then the people of Indonesia would be more towards responding and going out and buying those policies which they have never done. They might cut down some of the non-essential products buying and they will shift back towards some of the essential things and they might have already got the understanding we might have already got the understanding that insurance is not only essential but it is kind of a critical aspect of certain things which we need to cut down on some other post and invest in here so that we shape our future in an insured way.
Karin: So it is actually an interesting point because our financial literacy in Indonesia remains low, there’s only about 30% of Indonesians who understand the concept of savings, investment and insurance is as low as 30 per cent. So it’s a big job for all of the industry players in the financial industry not just insurance but also bankings will be financing to keep up with this education level the understanding on how to manage our own money because that’s the only way for Indonesian to be able to be a wealthy country in the future is only a family can manage all these income within their own family. So I think for us we use this momentum or from another month that we come up with this brand campaign to start with goodness. So we want to bring this awareness early on to Sharia. So it’s the Sharia line business, which was not much known in the past. But we believe that this is a different way of doing the protection business because it’s true communities where all of the members help each other. So we do this campaign by saying that we need to start with goodness. Once you are a member of an Allianz Sharia not only protecting your family, but you also help the other members because essentially the difference with Allianz sharia is all this contribution or premium, there are people Allianz sharia is used to help whoever needs it. So I think that concept highlights that anyone can help each other. It’s a concept that fits into the month of Ramadan where everybody wants to do good and then whoever does good will have a blessing.
Prashant: Great. I think that’s a great initiative. I think a lot of things I’m hearing from the first time are some of the brilliant things and out-of-the-box. I would say while a lot of other companies and Industry may not have adapted, Allianz has already taken and is way ahead on this so I would congratulate on the initiatives which you have taken and impacting the lives of people in Indonesia and we should be best in terms of taking this forward and changing the complete landscape of the market positively.
Karin: Thank you.
Prashant: So thank you so much for your time and your voice in any form of certain curated content and in a form of podcast could certainly reach out to the people of Indonesia and also to all the industry leaders within insurance or cross-industry leaders into likes a Marketplace or you talk about banking because bank and assurance is also one of the channels which perform very well for insurance as a segment. So thank you so much for your time Karin.
Karin: Thank you for the opportunity. Stay healthy and stay happy.
Prashant: Same, but I think all of us and our prayers for resuming back to normal.
Karin: See you soon. I hope so. Thank you.