Rajesh SudCEO and Managing Director of Max Life Insurance
Rajesh Sud is the CEO and Managing Director of Max Life Insurance, one of the first three private life insurers to start operations in 2001, when the insurance sector was opened to private participation. A founder member at the company, he is committed to achieving the Vision of making Max Life Insurance the Most Admired Life Insurance Company in India. Rajesh is also the Chairman of Max Bupa, the health insurance joint venture of Max group. Over the last five years, Rajesh has led the company through one of the most dynamic periods for the industry. Under Rajesh’s leadership, Max Life Insurance has become the largest non-bank life insurer in the country having a consistent record of profitable growth for the past five years. He has made significant contribution as a senior industry leader by shaping industry agenda as member of various committees in industry bodies. He is especially passionate about “customer centricity” and as the Chairman of the Consumer Awareness Committee of Life Insurance Council led that agenda.
1. What was the mandate given to you by the Board when you took over in your role?
It would not be wrong if I say that it was baptism by fire when I took over as CEO & Managing Director of the company. Major global economies were reeling under the financial turmoil and India was not immune to its impact. Max Life Insurance was going through a major growth plan to expand its distribution network multi-fold. The mandate to begin with was to successfully implement the growth plan but as the events unfolded in Indian and global economies and the Indian life insurance industry in particular, it became more about protecting what we had built over the first 8 years of our operations. I always had a belief that Max Life Insurance has the ability to lead the industry on quality parameters and that led to our strategy to build on our strengths and utilise macro and industry changes as an opportunity for us. As an outcome, we moved up from number 7 amongst the private life insurers to number 4 position with a market share of more than 10 percent and have maintained it over the years.
2. How much of that has been achieved? What were the challenges faced?
Since inception, we as a company were clear that we want to earn the admiration of all the stakeholders and that is reflected in our vision ‘to be the most admired life insurance company by securing the financial future of our customers’. To state a few of the parameters that we consistently focus on and are most proud of pertains to quality of our business and our focus on customer centricity. Max Life Insurance has the distinct recognition of being the first company to introduce freelook period, adopt Treating Customers Fairly principles and launch claims guarantee. We also have the distinction of having one of the most productive agency distribution, the largest non- captive bancassurance relationship with Axis Bank and best in class customer retention. We have not only been able to build growth momentum in difficult macro-environment and outperform the industry, we have created new benchmarks in terms of quality of business.
3. How do you respond to the needs of changing market scenario (with an example)?
As an organisation, we see every changing dynamic in the industry as a challenge to get better, get stronger and get more efficient. Most importantly we view it as an opportunity to bridge the need gaps of our customers.
A good example will be to take the advancement of technology and how most customers and potential customers are now going online to do their research on product solutions that was typically researched and bought offline. We knew that it was time to embrace this change and show customers that we understood and could give them what they wanted. We were the first private insurer to launch an online term plan where claim amount is paid to the nominee in monthly instalments for a total of ten years in addition to lumpsum. This feature was introduced as consumer insights revealed that the families are not ready to handle large corpus.
Given that we understand the growing impact of the digital footprint of customers, Max Life Insurance has established a Digital Centre of Excellence in 2014. This drives synergy across all digital initiatives as well as coming up with new ones and unifies all the digital initiatives of the company under a single umbrella.
In 2013, the company equipped its sales force of agents with tablets. We undertake a comprehensive need analysis through tech application which helps our customers to identify need gaps and their risk profile which in turn helps them make informed product choices.
Max Life Insurance as a service provider has been focussing a tremendous amount of energy in providing services on the go to our customers and distributors through mobile based applications. Some of the key apps developed include mSales (from prospecting up to lead generation), mApp (from application to issuance of policy), mService (post issuance of policy), mRec (for recruitment), etc. The team involved looks to roll out new features and advancements every quarter. The broad objectives focus around enabling the digital growth of the company, increasing digital driven revenue, reducing cost of selling and promoting right advice in selling. The company is also targeting to improve customer experience by reducing turnaround time for its services and providing on- demand and self-service to customers and through selling and servicing anytime, anywhere and on any device.
4. How has the market evolved in the last few years?
The life insurance industry has undergone significant changes in terms of regulations in the past few years. While ULIPs have undergone a complete makeover with lower charges, traditional products too have been overhauled to deliver higher value to customers. As both have been redesigned to yield better long term outcomes for the customer, life insurers today have a bouquet of attractive products to serve various life stage needs.
The regulatory focus is on long-term savings and protection which is also good for the industry – in fact, that helps promote the true purpose of life insurance products and differentiates them from other financial instruments. There have been some distribution related regulatory changes that are expected to bring about a change in the way industry reaches out and engages with prospective customers.
To begin with, for agents to renew their licenses, they need to achieve a persistency of 50% or greater and insurers are being allowed the freedom to issue licenses rather than agents sitting through the process of centralised testing for the renewal of their licenses. IRDAI has come out with regulation on Insurance Marketing Firms (IMF) and Bancassurance which allows Banks and IMFs to sell products of more than one life insurers, general insurers and health insurers each as well as allow IMFs to sell other financial products.
With regard to ensuring better governance, IRDAI has established a With Profits Committee for all participating products to ensure that all expense are allocated in a manner that provides the return due to policyholders. In a bid to promote greater efficiency and transparency in disclosures by all insurers, IRDAI has set up the Business Analysis Portal for the purposes of regular reporting. The Insurance Bill, which was passed in 2015, has provided greater regulatory power to IRDAI and also initiated change in multiple regulations.
The economic factors and stable political environment has provided growth impetus to Indian life insurance industry. After recording decline in new business for three consecutive years, private life insurers recorded growth in new business in FY15 and have continued that growth trajectory in the first half of the current financial year also.
5. What are the key challenges your organization is facing currently? And what are the steps you are taking?
The biggest challenge which Max Life Insurance as a company is facing is something that is common with other life insurance companies. This is the problem of making people understand that life insurance is a long-term commitment to build corpus for life stage goals as well as to protect life style and meet those goals even in the absence of breadwinner. As an honest life insurance company that focuses on Sachchi Advice, our constant focus is to explain to our customers that a life insurance policy should not be bought with a short-term perspective. However, in the long run when our customers need the funds to meet various life stage goals, thats when they will be glad that they had invested in a life insurance policy. We forsee more regulatory and macro-economic changes and companies and their distributors need to be agile to adapt quickly to meet these changes. I think it is definitely a challenge to change the mindset of people to think long term when the stock markets are doing well and short term gains are there for all to see. All we can do is arm our agents with the correct training to serve customers to their fullest. We hope that the sachchi advice provided by our agent advisors, who are feet on the street can make them understand how valuable a long term investment like a life insurance is not just for protection in the event of an untoward event but also for meeting life stage goals like money for children’s education or their marriage, own retirement and maybe even the purchase of the dream house.
6.How have the changes in technology/globalization/economy affected your sector?
Digital insurance in India is set to increase rapidly and is supported by the broadening of the digital influence in India. The fundamental contributor for this digital explosion is the rapidly increasing mobile and internet penetration in India. Technology is already beginning to have a substantial impact on direct sales both as a distinct channel and also by providing leads. According to the IAMAI, September 2015 study, India has over 354 million internet users, more than the population of US and is the second largest country by the number of internet users after China. 60% of the internet users in India access it through their mobiles. Interestingly, India’s pace of growth and catching up on technology trends is very different from other developed countries. The speed of adoption of mobile and mobile internet has been phenomenal and has completely changed the industry. We are also witnessing the phenomena of the 25-35 profile who live their life on social media – hence social plays an important role in shaping their opinions as well as their decisions. Intelligent hardware is the next big thing – from small screens to wearable – demand for everything on fingertips. Digital has made the industry and distribution models fluid. You don’t have to depend on the company to generate leads or reach out to customers. Agent advisors can use digital media to reach out and build strong contacts with the customers. In addition to direct sales, technology plays an important role in influencing customer advocacy, information search, price discovery, renewals and offline premiums. Agents are now using digital tools to acquire and service. Technology offers insurers an opportunity to improve both front and back office processes and costs. Tools like the use of Big Data and Telematics enable for better underwriting of risk, claim detection and overall reduction in claim costs. According to a report published by the Boston Consulting Group, by 2020, online renewals are expected to be 35-50 per cent of individual renewal premiums. Technology in the years to come is also expected to play a critical role in building customer advocacy.
New opportunities are emerging for organisations to optimise their operating models by bringing down their cost ratios, embracing going digital as the way forward, focusing of building their online portfolio of products and making better use of customer advocacy and branding.
7. What is your talent strategy? How do you draw the balance between home grown vs lateral hiring at the leadership level?
At Max Life we believe in attracting and nurturing top talent, We believe in giving them opportunity to not just grow vertically but also to expand their skill sets and thus move across different verticals. As a process any new job opportunity is first shared with our employees and if we do not find fitment within our own talent pool, only then we look for people from outside. This philosophy applies across levels. We have many founder members in the team who have grown across ranks and verticals and now hold leadership positions.
8. How does your organization identify and develop future leaders?
We have a structured process aptly called the organisation talent & review (OTR) process. As per this process, managers share the status of the talent in their unit with their managers. The scope of the review includes identification of critical resources, succession pipeline, values & engagement assessment. This process has been in existence for four years now and covers all managers from mid management levels and above in the company.
While the identification of emerging leaders is part of OTR process it takes into account consistent performance and demonstrated ability of the person to take on higher responsibilities. Role modelling of values is considered as a given and is non-negotiable.
For development of talent, we have a comprehensive development programme in place. Some of the key levels deployed are –
- Active engagement by supervisor on the job
- One-on-one interaction with top leaders
- Assessment tools such as 360 assessment & feedback and Hogan
- Interventions such as coaching, mentoring and nominations to workshops/conferences
- Participation in business critical projects and various cross functional councils
9. What are the 3 key aspects you look at when you hire your direct reports?
At Max Life, we lay utmost emphasis on our established value system: Caring, Credibility, Collaboration and Excellence. I personally seek people who share similar values in their professional and personal life. I look for an ownership mindset; someone who is excited about building Max Life into India’s most admired life insurance company and has the work ethic, the motivation and the spirit to deliver sustainable results. Humility and a learning attitude are the other key attributes that I look for in people.
10.How does the growth prospect of your organization look like for the next 12-24 months?
We expect the industry to regain its growth momentum and private life insurance companies are expected to record double digit growth. Max Life Insurance will continue to outperform the industry and continue to be recognised as an industry leader on multiple performance parameters.
11. Will there be any significant change in the market dynamics in next few years? If so, what steps are you taking for the same?
TSome of the key changes in market dynamics over the next few years are:
Expect increased M&A activity in the life insurance industry. We believe with 24 national players and most of them not able to offer either product or service differentiation, larger and stronger players will have the opportunity to explore inorganic growth opportunities.
Regulations and guidelines that will be issued by the regulator are going to become largely customer centric with a focus to simplify products and processes. As a leading player in the space, we welcome every move that benefits our customers. To maintain the customer centric framework of the company, we have established the Treating Customers Fairly (TCF) framework that remains the bedrock of all our customer centric initiatives.
Our focus over the next few years will be on advocacy of the consumers and the regulators. We will also look to share our point of view through participation in industry forums, dissemination of white papers and participating in insurance committees.
12. How Indian leaders can become Global Leaders?
The number of Indians in leadership positions has significantly grown in Fortune 500 companies and other rapidly expanding multi-national companies the world over. A few traits to be successful global leaders that I personally feel are most important are:
Business knowledge and innovation – It is critical to understand the global strategy of the business and actively contribute to its creation and most importantly, its execution. This also helps to gain a good understanding of competition and keeps one regularly updated.
Building close relationships – Leaders need to spend a significant amount of time building relationships, with clients, within the organisation and other external stakeholders like investors, shareholders, media, etc.
Ability to handle complexity – As a global leader it is imperative to develop abilities to handle complexity, ambiguity and to become more adaptable and flexible. It is important to learn to adapt to differences and improve cultural awareness. This will go a long way in significantly improving overall sensitivity to different cultures and the understanding of the expected norm of behaviours.
Gain a cultural knowledge and understanding of as many markets that the organisation is present in- This means asking local business colleagues what is appropriate and how to conduct themselves in critical/important situations. It is important to always show respect and an understanding of the local business culture to always interact with people in the most appropriate manner that is locally prevalent.
Communication clarity: Ensuring that the focus is on articulating an organisation’s compelling vision, showcasing consistent behaviour and having an openness to feedback play a very important role.
13. What are the 3 most pivotal moments in your career that you either learned from and/or that got you where you are today?
The 3 things that shaped me into who I am today happened at various stages of my life.
The first most pivotal moment in my career was the launch of the retail finance business by the Bank of America. By virtue of being part of the team, I seized on the opportunity to build my relationship not just with the internal stakeholders but also outside the bank in particular with the auto dealer’s network. This allowed me the opportunity to be a part of the team that built the business from scratch and established the brand by beating all the odds.
After leaving the Consumer Business of the Bank of America which was bought by ABN Amro, I was given an opportunity to become the CEO and MD of Esanda Finance India, a subsidiary finance company of ANZ Grindlays. By becoming CEO at such an early age I developed and honed my insights on how senior leaders had to think and act to ensure that organisations were guided in the right manner to achieve their overarching vision.
Finally, leaving the world of banking behind and joining an unproven life insurance industry in India took a lot of thinking. However, I can without a shadow of a doubt that it was one of the most pivotal moments as it allowed me to explore an untapped world of challenges and gave me the freedom to try new things. I wasn’t afraid to fail because I knew the organisation was supporting me 100% of the time as long as I did things the honest and right way.
14. What key lessons have you learnt from any mistakes, if any, made in the past? How would you do it differently?
The key lessons learnt from life and my daily experiences are:
Leadership is the art of role modelling and inspiring collaborative action at every level of the organisation to achieve sustainable results aligned to the common vision.
Create an operating environment where the where the best can deliver continuously, foster openness and collaboration, empower them and hold them passionate, intelligent and accountable.
15. How do you define & practice leadership?
I think as a leader the key to be successful is to hire people who are value add consistently. Empower them with the tools, technology and the processes to do what they do best and then get out of the way. As a leader my job then becomes to create a suitable culture for empowerment to begin with. I believe that empowered teams have increased levels of responsibility and authority over the work that they do, giving them the autonomy to plan and manage work, make their own decisions and solve their own problems.
However, this doesn’t mean that I am purely present as a figure head who people turn to when a crisis hits or when advice is sought. I firmly believe in setting the example by leading from the front. One of my greatest leadership mantra is “If it’s got to be, it’s up to me.” This inspires me to motivate my team and me towards raising our benchmarks and setting standards of accepting responsibility and accountability. Another thing that I firmly believe in is my people and my team. Over the years, especially when we faced some challenging times as an organisation, it became crystal clear to me that “People don’t care how much you know until they know how much you care”. This fundamental truth binds me to all my teams and it is a belief that I encourage them to practice this with all their direct reports and so on and so forth. More than anything, it exemplifies how we work together in teams and the engagement from heart that drives extra-ordinary effort and results which has a direct impact on the overall productivity of the organisation.
16. What message would you like to share with young professionals at the start of their career?
The one thing I would like to share with young professionals is that we live in a world of limitless opportunities. Life is a marathon not a sprint. Stay hungry and humble while looking to evolve continuously, reflect, learn and grow as a person. In a nutshell, you need to cultivate an attitude of gratitude as you start your career and that in my mind will take you a long way in the years to come