Medical tests may not be necessary for getting yourself a term cover even for a large sum assured, if ICICI Prudential Life Insurance has its way.

As part of a process simplification objective, the private life insurer is looking at whether publicly available information of a customer could be used to assess mortality in a faster way than requiring him to go through ‘medical tests’, a top official said.

“What we are trying to do is: if I know the profile of a customer, can I assess mortality without using medical tests. We will use artificial intelligence and the idea is to find a substitute for medical tests,” Sandeep Batra, Executive Director, IPRULIFE told BusinessLine .

“Is a medical check-up the best way to predict mortality? That is the question we are challenging,” Batra said. The main benefit for a customer (if medical check-ups are substituted) is process simplification and easier on-boarding. “If the process is convenient, we can sell more. The process has to be simple,” he said.

Focus on VNB

For the company, the benefit would be getting more cost-efficient and thereby improving the ‘value of new business’ (VNB) for shareholders. “The idea is to see to what extent I can give you a sum assured without having you go in for medical check-up. Till now, we could give up to ₹50 lakh. Can I give you a cover significantly higher than this without medical tests is what we are looking at,” he said.

Batra said that IPRULIFE will continue to focus on expanding VNB in rupee terms for its shareholders. “As a company, we are focused on expanding the VNB. That story stands. Our VNB story has been good,” he said.

Simply put, VNB is the profit the company (insurer) hopes to make on policies written during the year after accounting for all the costs incurred, assuming future persistence and mortality.

For 2016-17, the private life insurer’s VNB was at ₹666 crore — a 61.7 per cent increase over the previous year’s ₹412 crore. It was ₹270 crore in 2014-15. VNB in the first nine months of 2017-18 was ₹767 crore — an 82.2 per cent jump over the ₹421 crore in the same period of the previous year.

Priority list

On the priorities for the current fiscal year, Batra said that in the savings segment the focus will be on rolling out more customer-centric products. On the protection side, which is growing faster than savings, the focus will be on simplifying processes. For shareholders, the focus will be to continue expanding VNB.

Batra said that the top deck in the life insurance industry has been recording a strong growth in new business premium at 17 per cent CAGR in the last three years. “The industry is doing well. We have been saying that industry will grow ahead of the nominal GDP and I think the story stands. Financialisation of savings has helped us,, he said.

Government initiatives on digitisation, RERA, GST should further encourage this (financialisation of savings), he said.

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