The Future of Insurance in India | Sarbvir Singh of PB Fintech

Our guest today is Sarabveer Singh, joint group CEO of PB FinTech, India's biggest insurance aggregator. I think the biggest road driver for PB and for the industry is building customer trust. You are taking money upfront, you're going to give a benefit later. An alumnus of IIT Delhi and IIM Ahmedabad, Sarabbir has had a career spanning various industries, from private equity to venture capital to digital ventures, before finally taking on the reins of PB FinTech, which is also one of India's leading licensed insurance brokers. My upbringing as a son of an army officer, traveling to different parts of India. As we were just discussing, I lived in the Northeast for a long time, working abroad. I worked in Hong Hong Kong, in New York, and then obviously last 20 years in India. This entire experience has prepared me for insurance. Meanwhile, the insurance industry itself is at an inflection point. Millions of Indians remain uninsured. Healthcare costs are rising. But regulations are being rewritten, foreign capital is coming in, and AI is getting into insurance underwriting. Also, companies like Policy Bazaar are going beyond just selling insurance into the healthcare sector itself. There are only 1 crore Indians who have term insurance. The more people stay out of hospital or less amount is spent on them is better for them. So true. Whereas from a hospital perspective, only when the person comes to the hospital can they make any money out of it. It allows you to really narrow down on those 5, 10, 15 people whom you need to look at closely. What we realized was that there is a need for a hospital network which focuses on working with insurance companies. So, what lies ahead for the insurance industry and its biggest marketplace? Let's find out. See, our goal, our mission of our company is that every family should be insured. Listen on, it's Monday the 20th of July. I'm Anirban Chaudhary. This is Corner Office Conversation. Hi, Swarabbir. Very warm welcome to the podcast. Thanks, Anirban. Very happy to be here. Right. Let's start with your journey. An army kid, IIT, IIM, and then several ventures, right? Investment banking, venture capital, even a media venture. and then finally on to a sector which deals as much with money as life and death and health. What are the lessons that you brought to where you are currently? So, you know, I believe that everything that you do, Anirban, prepares you for the next chapter. And, you know, there is a bigger force which decides what's going to happen. And I think in many ways, my upbringing as a, you know, son of an army officer, traveling to different parts of India. As we were just discussing, I lived in the northeast for a long time. And also the army, you know, shows you the realities of life. You know, things happen, right? People pass away. Their families have to be looked after. The amount of money that is there is not, you know, very high. It's a lot more around honor and things like that. I think that was a very formative. Fundamental. Yeah, fundamental learning. And then, of course, as you said, working abroad, I worked in Hong Kong, in New York, and then obviously last 20 years in India. So I think this entire experience has prepared me for insurance because I can understand the reality much better. I can empathize with some of the challenges that people face. And I think I feel I have a better sense of, you know, things that happen. Because the biggest challenge with insurance is that you are being forced to consider unpleasant future. And that is very hard for human beings to do. Because we always, obviously we are an optimistic community. We want things to be better in the future than they are in the past. So, you know, talking about death, talking about illness is not an easy thing to do. But only when you've really seen it yourself, I think then it really helps. And I feel like definitely it has prepared me for this part. Okay, let's come to the landscape. To put it really broadly and bluntly, India is still massively underinsured. Why and how do you see this? So, I think you're absolutely right. The problem is clear to everyone. It is underinsured. I feel sometimes that the metrics that we use to understand it are not correct and I'll explain. I think the most important metric to be used is how many people are covered and what is the sum insured in the case of health insurance and some assured in the case of term insurance. Because it doesn't matter actually that how many people have policies. What also matters is what kind of policies do they have and what are they protected against. So unfortunately against on both counts we are behind and both counts need a lot of work. Again one can go into many reasons for it but I feel that rather than... Is it about 7 to 8 percent the penetration now? So the way I look at it is that in health insurance, there are 6 crore Indians who have retail health insurance. There are another 20-25 crore Indians who have insurance through their companies. But obviously, those are only valid till they have a job. And then there are only 1 crore Indians who have term insurance. So in my opinion, that 6 crores needs to be at least 20-25 crores. You know, if I just look at the demographics of India. And that 1 crore, because it's about household, not people, should at least be 10-12 crores. So we are somewhere between 5 to 10x short of where we need to be. And obviously, as incomes rise, these numbers will keep changing. So I think there is a lot of, and I think there is a fundamental, see, it's not about cost. See, a lot of times people feel that insurance, is it too expensive and all that. But that's actually not true. I mean, both term and health insurance in India are quite affordable. And I'm not comparing to America or Japan or something like that. I'm comparing to the cost. I mean simply put cost of term insurance for a 30 year old is only 1500 rupees a month right and they can get one one and a half two crores of insurance 1500 today is not beyond the reach of a lot of people absolutely I think the bigger issue is prioritization I think we need to you know it's this whole thing I am too young it's never going to happen to me it doesn't matter there is some concern you know around whether a claim will be paid or not I think the trust and confidence in the product is the critical issue. And obviously, the second thing is literacy. I think we need financial literacy in this country. And that's something that... You don't think Indians, especially young Indians, are saving enough? Well, that is definitely true. I think young Indians are not saving enough. And I think the biggest challenge in our country that we face actually is that we have created a very unique kind of society. See, we are not a country which has social security yet. Very difficult for the middle class for the government to take care of the middle class they have to take care of the bottom of the pyramid it'll take us a while before we have the per capita GDP to take care of the middle class we don't have any more you know in the new tax regime there are actually no incentives tax incentives because earlier the big story used to be the one and a half lakhs that you had to save because you got a tax incentive so that has also gone out of the window and we are expecting that people will you know save money in my opinion this is one of the biggest issues that we are facing in our times and that's why I come back to financial literacy. I think financial literacy is super important in this kind of a scenario because if you expect me to take care of my future then I must have the knowledge to take care of my future right and I think that is a very important area to focus on and you know I hope and we are trying to do a bit but you know the society at large I think it has to be taught in schools in my opinion it's more important than teaching calculus or trigonometry or something like that because this is a very important subject. Okay, coming back to your business Tell me about the health piece So if I'm not mistaken The biggest growth Just in terms of percentages Has come from health and renewals If I'm correct Yeah, so I would say that We have two parts to our business Fresh acquisition Where we acquire new customers And then renewals Where the people whom we have acquired They renew And the latter has done very well for you Yes, both have done very well for us I would say that Both require different focus I think in the fresh, the main thing is to explain to people why they need insurance and you have to get them across the line that, okay, look, you need to protect yourself. You need to do this. And there, as you said, in health insurance, we have grown very strongly. We have almost now 60 lakh people whom Policy Bazaar covers through health insurance. What's the growth like annually? So the growth, I think we've discussed this in the last three years, we've been growing at 60% year on year on the fresh side, which is quite significant. the renewal you know obviously follows fresh and there our main focus is to get the renewal rate up so our renewal rate has increased significantly which is what you were referring to in terms of the growth in renewals and that has come because more and more people are continuing to place their trust in renewing through us and staying you know in health insurance so both are slightly different areas i think fresh acquisition is very hard and is very important renewal you have to give confidence to the person that look you've done the right thing and by being here so both are very primary focus for us and you know we've been doing a good job I would say on both sides. Okay now you've made a fairly significant quite remarkable pivot to not just selling insurance but also delivering health care through PB Health right. First of all of course what made you make that pivot and this is something you must have discussed but I really want our listeners our viewers to also listen to it. Correct me if I'm wrong, but is it two hospitals that have been inaugurated in the last one month and you've also raised $200 million and what you're planning is a tech first integrated hospital network. Tell me about all of this. Sure. So let me first explain why are we setting up hospitals I think as we you know as we looked at health insurance we understood that there is one major challenge with health insurance which is that the health insurance companies and the hospitals are actually in a way have different incentives From a health insurance company's perspective, the more people stay out of hospital or less amount is spent on them is better for them. So true. Whereas from a hospital perspective, only when the person comes to the hospital can they make any money out of it. So from their perspective, you know, getting as much as you can, especially if a person has health insurance is in their favor. Now, we always believe in policy vizards that incentives are the root. You know, that's how things move or don't move. And, you know, that's what you should focus on. So what we realized was that there is a need for a hospital network which focuses on working with insurance companies. See, because what I just described to you is a short term issue. In the long run, hospitals need health insurance because without people being able to having health insurance, they cannot afford certain hospitals or certain kinds of treatment. So actually, in the long run, both are very aligned. What we are trying to do through PB Health is to create that alignment of interest such that our hospital network and insurance company, not just policy with our health insurance, but overall insurance, health insurance are aligned and they benefit from each other. Now one of the things is that in the long run like I said hospitals and healthcare and health insurance are completely aligned In the short run what we are trying to say is that rather than saying that you only get paid for incident Is there a way that a hospital network can get paid for taking care of people Which means that if somebody comes to OPD instead of saying how can I make this hospitalization or IPD incident can I treat that person in OPD, send them home and yet get paid something more than what I would have got paid just for the OPD. So this is a complicated thing to achieve in real life but I think what we are trying to do is to create alignment of interest between hospitals and insurance companies and through PB Health we want to create a working model because what we realized was that today there is no working model. So people are looking at it and saying okay fine you know you guys are talking about it, but we don't know how this works. So we are doing that to create that working model. We understand that in a country as large as India, we will not be able to necessarily cover all of India. But what we want to do is create a working model and then hopefully more people will join this movement. Because in the long run, we believe that hospitals cannot exist without health insurance and obviously health insurance cannot exist without hospitals. So we are setting up the two hospitals that you referred to in Noida and Gurgaon. in some cases you know we are buying already existing facilities in some cases we are refurbishing existing facilities or taking them on lease etc but we are fully i mean we have team of doctors we have a team of i mean these are specialized people we are fully into health insurance i mean in hospitals we are not this is not just a synthetic experiment okay but insurance and health care are often conflicting aspects of a business so how do you straddle the two see fundamentally there are two things. One, when the policy is sold, you have to ensure full disclosure to make sure that whatever was insurance company's main concern is that it should not happen that you came with an existing disease and you bought a policy and you're now taking treatment which is going to cost five times the premium or ten times the premium knowing fully well that you were not well. So, that's one point for disclosure. So, that is something that PolicyWizard has been focused on and we continue to drive that disclosure should be accurate. Second thing what happens is that the hospital and the insurance company don't agree on the line of treatment, right? They are saying, okay, this should have happened. They are saying, no, no, this should have happened. Our view is that you cannot have two people looking at the same thing again and again because the minute there's a second person, that person is likely to feel that I should add some value, right? And whatever the first person said is not fully true, right? That we see in our daily life. So, what we are saying is work only with trusted hospital providers. So what we are telling our PB Health is telling its insurance partners that when a person comes to PB Health, please trust me that whatever is being told to them, whatever is the line of treatment, that is the right line of treatment. You need not re-examine that. What you can do is that on a monthly basis, quarterly, yearly basis, you come and audit me. You can send your doctors, come and audit me and make sure that I am doing what I am And if I'm not doing something that I was supposed to be doing, I'm happy to pay you or commercially manage that situation. So that the patient doesn't, on a case-by-case basis, doesn't see this problem. The third thing is that the processes itself are broken, right? The first, you know, like what happens when you check out? First, when the doctor says, then someone has to come and, you know, write the discharge summary. Then someone has to collect what medicines have you consumed? What medicines did you return? I was just going to ask you. So what we are saying is that that entire process at the hospital end. So at least in our facilities, we are cutting all that out. Like I said, you almost have a real-time bill that is being made. And see, all of this is possible today. It's not rocket science to do that. Like hotels practically do it for you. So the same thing we are doing here also. Look, everything is well known. We are kind of... And finally, see, we are also trusting the patient. So let's assume that because we know that the insurance company is going to say yes, because it's a logical claim, They are not going to second guess us. And thirdly, we know that the patient also is a, you know, if something happens, we can recover from you or we can maybe ask you to leave a card if there is any, you know, uncertainty or something. So I think by bringing, by adding trust between the three parties, I think we can solve this problem. And that's what we are attempting to do. It's not about, if you ask me honestly, nothing prevents today also this from happening. It's just that the processes and the trust between the parties has to be there. And see, once insurance companies realize and agree that PB Health is on their side, and you know, you can see that, right? Like the cost of its treatment is X versus Y. They will also, you know, they can also see that we are being right. Finally, if you come to our facility and I would invite you to visit our Gurgaon Hospital, what you will find is that it's very functional. See, it's not like a five-star hotel or something. It's very functional. The lobby is not, you know, 60 feet high or anything like that. it's very functional, it's focused on making optimum use of the space that we have. And I think that's the final answer. See, not all of us can afford to go to five-star hotels, right? To eat or to live or whatever. Now, today we are expecting that, you know, just because I have insurance, I should go to the most expensive facility. That's not possible. I think it has to be right size and the equipment. So, what we believe is the equipment has to be world-class, the doctors have to be world-class, but the rest of the stuff has to be appropriate, not, you know, not crazy. Tell me about taxes. GST cut removed that 18% burden. But then insurance, insurers also lost input credit now. So the saving, is it actually reaching customers right now? Or are premiums quietly rising to offset it? So I think the answer is nuanced. I think for the first six months, definitely customers got 100% of whatever the savings were because I think that was kind of the plan also. I think over time, it's very hard to answer this question because see over time, premiums do rise, right? There is healthcare inflation. So is it because of GST or is it because of healthcare inflation is a hard question to answer. Our view is that people Insurance companies See finally there is a market So there are competing insurance companies No one insurance company can raise prices If you know others don't So I think what we have seen is that Insurance companies have started Trying to raise prices by like 5 to 7% or so every year So that it's a more consistent increase Rather than you know Trying to raise prices after 3 years And you know that number becomes 20-25 And that pinches a lot more So I think that's what we are seeing in the market. Yes, there have been some price rises of late. Largely, I would say they are in the 5 to 10% range. And I think that's fair given the inflation. So there is a benefit. There is a benefit. I think the GST benefit has been passed on largely to consumers. And, you know, there is a benefit. Now, again, you know, the only reason I hesitate is that, you know, there is always one or two examples that can be found where maybe somebody's premium went up more because their age band changed, the product changed or something like that. But in general, overall, what we see is between 5% and 10% price rise, which is very much in line with inflation or what used to happen pre-GST. Right. Also, there was a spurt in purchases, I think, up to the announcement. Has that sustained or was that just a spurt? So, the first six months were good. I would say that from October or September, October onwards till about March, it was a pretty good time. This quarter, well, I can't talk of specific numbers because of, you know, being a public company, etc. But I would say that it is higher than it was before September, but it's not as high as it was during those six months that we had. Got it. You know, do you see, you know, with this whole, you know, again, this debate on savings, etc. Do you see more financial liabilities coming into the insurance sector? For example, say home loans. I'm just spitballing here. But, you know, do you see that happening? and what role can, of course, the industry play? So I think one of the areas that, since you mentioned home loans, one of the areas that I feel and which gives, I think, our industry also sometimes a bad rap is that, you know, many times we sell products which are attached. Like in home loans, typically you will find that and a lot of customers don't even know that. But they normally have a home loan insurance or credit insurance attached to it. Now, many times those credit insurance, the cost of that insurance is very high. It's a one-time payment. it gets attached to the loan. So in a way, you're paying interest on the premium also, right? Because of that. And I believe that, you know, we can have much better products. So for instance, at Policy Bazaar, we have launched home loan insurance, which is monthly. So you only pay till you have the loan. The value of the insurance also declines as you repay the loan so that, you know, the asset and liability are matched. And I think it's all around, it's like a 70% better value than a one-time payment that you pay in attachment. Now the challenge is that we need to get the word out there and explain to people that look you have this alternative and this is a better alternative You know obviously when you are buying a home you excited about buying the home The loan is just a bunch of paperwork and you just sign whatever is put in front of you So, I think it's a difficult thing. But yes, I do agree that a lot of these liabilities can be managed and should be managed through insurance. But we need to be careful that we're using the right kind of product to manage them. So, you know, when you listed, a lot of people thought that your growth driver would be Paisa Bazar. And then, of course, the RBI tightened its norms on unsecured loans, etc. And then, you know, that put pay to a lot of plans and you also pivoted to secured. Tell me about how Paisa Bazar is doing and, you know, what do you see as the way forward? The other piece is, of course, PB Pay, but we'll come to that later. Yeah, so I think first on Paisa Bazar, you know, it's a huge opportunity. See, credit is a much bigger opportunity than even insurance in India. It's a product that people want to buy. I mean, people want to take credit. It's a much, I would say, much more positive story in that sense. I think you're right. You know, Paisa Bazar did go through a rough patch because of all the things that you mentioned, tightening of credit norms, etc, etc. I think what we are trying to do is that as we come out of it, see the whole idea is that, you know, as you come out of something, you want to be stronger than you were going into it. And that's what our team is now focused on. You know, we have new management in some leadership change. And one of the things that we are focused on is one is building a rounded portfolio. So not just unsecured credit, but also secured credit. And also in Pesa Bazaar, we are moving into the saving side of the equation. We are saying that it's not just about lending, what about saving? So, you know, we've made some foray into bonds. You know, bonds are an attractive asset class. That's something that we are focused on. We are helping people look at their overall credit profile and say, how can we improve your credit profile? Because that's an important aspect. Thirdly, you know, we are looking at mutual funds and saying that, how can we be part of, you know, that very large opportunity? So, I think Pesa Bazaar is trying to become a more rounded entity and focus on not just credit, but on credit savings and helping people with their credit. Got it. Tell me about PB Pay. I mean, digitization is so huge now when it comes to insurance. How is it growing? So, PB Pay is a very new initiative. I think we got our license just earlier this year. I think there, you know, it's not a... Our idea over there is quite straightforward. We believe that insurance, collecting insurance payments is a specialized business. We have, you know, learned that along the way. And we believe that we can... It's kind of almost like, think of Policy Bazaar as almost like a reference customer for PVP. But then we can actually offer it to others. In a way like AWS or many other companies started where they had a reference customer and then they kind of went out. And there are some use cases in insurance like monthly payments, making sure that payments are applied correctly, etc. Which we believe that we can do with PVP. I think our first stop is that. First, we want to solve insurance use cases. you know offer them to external companies as well and then as things develop we'll see because look there is no shortage of payment aggregators in India and I don't think we necessarily want to you know kind of go head to head against the very big players our main focus is to be a specialized company which solves very you know very clear use cases and then you know we'll see yeah I mean competition is one thing and the other thing is that this is another sector where the RBA has a very sharp eye and is very sort of absolutely and honestly look maybe because of our heritage you know we come from a regulated industry in insurance I think we understand why in insurance or in payments regulation is very important see you are handling somebody else's money so I think it's very very important that you follow all the rules and you know make sure that there is nothing that happens so I think we are I would say we are quite comfortable with it and when we set up the company we are very aware that we have to manage everything in a very very I would say clear way. And the same thing we do on the insurance side. So I think it's... Coming to the industry again, the insurance sector is going through a bit of an overhaul now. I mean, lots of things are happening. First, the 100% FDI route, which has already seen some results. Aviva, I think, is going to just take ownership of its Indian unit, which is, you know, Darbar Invest. How do you see this changing the sector, first of all? And then, of course, I'll ask you about PB's plan? Yeah, I think the way I look at it is that 100% FDI is, I mean, the timing is good, right? I mean, foreign companies also want to come to India. They are attracted by India's size and scale and everything. And the domestic sector is also equally good. See, just as Aviva is bought out its Indian partner or is rumored to be buying them out. Similarly, Bajaj has actually bought out its foreign partner, right? So, I think there are some Indian companies who are taking full ownership of the business, ICICI to some extent, you know, others. Equally, there are others who are, you know, maybe foreign partners are buying. So, it's a mix. I don't think it's not a one-way street. Secondly, I think, you know, as we discussed upfront, there is a huge job to be done, right? Lot more Indians need to be insured. So, I think new capital, fresh ideas are very welcome. And I think it will be good for the sector as a whole. But I just also want to say that I don't think it's the solution to all problems, right? I mean, you know, foreign Indian companies are very good. I think Indian companies are very well run. It's not maybe the stage we were in couple of decades ago where you could argue that a lot of, you know, intellectual capital was needed, let's say. So I think now both can compete and I think it'll be fascinating to see how they do. Have you got proposals from foreign insurers? Well, you know, obviously when people come to India, they talk to us from a distribution perspective. I think we are an open architecture platform. I mean a strategic perspective. Well, we've been very clear in saying that we are not interested in manufacturing. We occupy, I think, a very interesting place in the ecosystem where we are the online source of information and purchase and service for insurance. And I think that's a good place to be. And that's what we want to focus on. So we talk to everyone in terms of what products do they want to introduce? What are some of the gaps that we see which they could fill, etc. and I think that's really our place in the ecosystem I would yeah I mean why you would be so valuable is not just I mean it's also a storehouse of huge amounts of data for any foreign insurer that wants to exactly and then we and as you know we share that data with all our partners right I mean we share trends we share you know what has worked what has not worked very transparently with everyone because in the end see our goal our mission of our company is that every family should be insured. So, what we really want to do is that we want to make sure that better products, better propositions come to market. And many times, you know, new players is the right way to do it because they have more incentive to do new things. Yeah, right. On the flip side, your Dubai arm has been doing really well. There's been quite a rise in demand among NRIs to, you know, buy insurance policies in India. What are your plans there? Are you planning to expand to other locations? I'm sorry if you've already done that. No, no. I think we are right now outside India. We are only in the UAE. That's our current plan is to be only in the UAE. We think it's a very good opportunity. UAE makes a lot of sense for us. One, because there is a large Indian diaspora. So our brand is already known to those people. Number two, we realized that there is an opportunity in the UAE to bring the kind of stuff that PolicyVizard has done in India, which is bring data, technology, simplification to insurance customers over there. So now our customers in Dubai or UAE are well beyond just the Indian diaspora. NRIs we serve in two different ways. Some people who live in the UAE could use PolicyBazaar.ae. But we also have an NRI business in our Indian business. Right. Where NRIs from both the Gulf or Middle East as well as from the US, Europe, Australia, New Zealand, Singapore, you know, come and buy product. So we serve NRIs through both. and I think those are slightly different populations and different roles because the UAE business sells in local currency we offer local products and we solve those problems and there's a great opportunity for us we have become number one in I would say 5-6 years since we launched and I think we are doing really well I think the team is quite strong and we are doing really well over there. The other overhaul which is happening is the commission structure itself, the insurance regulator the IRDI is trying to overhaul the commission structure. It is in fact, if I'm not mistaken, advised insurers to replace upfront commissions with staggered payouts. The idea is obviously affordability and simplicity. I mean, it has also told insurers, don't just chase rich people, you know, make it more affordable, which is what we started the discussion with. How will this help you think what's really happening on ground? See, I think obviously we are all equally, you know, waiting for whatever the new distribution guidelines or reform will be. I think we are comforted by the fact that when we hear, you know, the chairman and others speak about it, they are talking about the, obviously, they're talking about the right thing. They are saying they need more Indians to be insured. They need more Indians to have the right kind of insurance, etc. So, I think we don't know, to be honest, we don't know what the outcome will be. Many of it is kind of in the speculation in the media is what I would call it. I think we are waiting for the, you know draft to come out and but yeah I feel personally that you know the objectives of the regulator and the participants are actually the same that we need to have more people insured and I'm sure they'll come up with the right you know guidelines and suggestions. The only one thing that I want to explain to you is that while commissions are an emotive subject obviously of course the truth is that it's not as if that commissions in India are particularly high or something. Look, they can be pockets. Again, you know, there are always pockets of something which may be not happening, which is not right, which can be corrected. But actually, you'll find that like at least in term insurance and health insurance, what we find is that India is among the products are among the cheapest and most comprehensive, at least in product definition. And number two, the commission structure and pricing is actually the lowest. Like we were with a UK distributor who had come to visit us recently And we were surprised to know that term insurance in the UK the first year commission is like as high as 300 because it a 30 year contract So they get three times the first year premium as commission. So we are obviously in India nowhere near that. And I think there is a little bit of confusion, especially in life insurance, because the first year commission is actually spread over 40 years. So when you look at 40% or something, it looks very high. But when you take that 40% and NPV it over 40 years, you find that it comes to 3-4%. Which is not dramatically out of line when you compare what the product is. It's a discretionary product. You have to sell it. So, I think, yeah, I mean, commissions are a tough subject. But from our perspective, as long as we all focus on the goal, right, which is that more and more people should be insured, I think these things will kind of, you know, align themselves in the right way. Tell me if you think enough is being done to stop mis-selling and do you think it's a problem that is being attacked well enough and do you think there's a solution in the next one or two years? See, I think what we believe that mis-selling is a product issue. It's not necessarily beyond a point a process issue. I mean, again, it may sound counterintuitive. But let me explain this to you See if you sell term insurance Beyond a point How much mis-selling can you do? Right Person is alive You have to pay the premium Person dies Before the policy term You get the money Now yes Maybe somebody is a little confused About some rider Or you know What is accidental death What is not Maybe But those are all 5-10% of the premium Right 95% of the premium Is on a very basic thing That if you die Your family will get the money You have to tell us All the things upfront, we do a medical test, we do everything. So it's perfectly clean. So if you ask me, there's nothing much to be done. In health insurance, yes, there can be a little bit of confusion around the fact that have you disclosed transparently everything. In fact, in health insurance, we believe that both distributors and customers should be brought into the value chain. And what I mean by that is that if a customer, see, I think the concept of a customer not having a copay or a deductible is actually very dangerous. Because then the customer has no skin in the game. And you will find that even in advanced economies, whether it's Singapore, Switzerland, America, wherever, there is always a copay or a deductible, however small it may be, because I think you have to align the interest. Similarly, I think you should align the interest of the distributor that if the disclosure, if the customer has made the disclosure, see like we have, all our conversations are recorded. If the customer has said something and it is not in the proposal form, then I think it is our mistake, right? And then we should be penalized for it. And I think the same thing should be done for all distribution that look, you are responsible for providing this information. So yes, in health insurance, there can be more things. And I think mis-selling is something that we must try to curb to every extent because it causes problems. Finally, I'll say there are a set of products where mis-selling can be much higher because the outcome is not clear. So, you know, for instance, we don't sell certain types of products in policy vizal because we know that we can't explain those very, you know, very logically or very clearly. And I think those product structures and product definitions should be looked at. Because again, like I said, if the product structure is right, you'll find that mis-selling will also be much less because you can't mis-sell something which is clear, right? One customary question on AI, obviously, especially AI when it's used for underwriting. How much of AI is PB using and where do you think it fits? So I think we, obviously, you know, it's a huge disruption, new thing that has come up. And I think technology, what we believe very much is that technology is an aid to human beings. And what we are trying to do is to make our advisors better. Like this issue of mis-selling that you raised. On Policy Wizard today, if you have a conversation, every call is obviously transcribed, is analyzed. And if we find that there was a discussion about a disease and that disease is not in the proposal form, we flag that. We say that, look, call this person up again and check whether or not this is that. Now, this is AI, but equally, we also have a verification team, which is different from our sales team, and we call every customer and check. So, I think what AI allows us to do is to become much better at saying what are the areas we should focus on. So, I give you one example like this. In term insurance, we evaluate the riskiness of the customer. Because, see, the insurance company is only seeing the proposal form. They have not seen the journey of the customer. Like, how did that person come? What did they explore? Where did they come from? What all did they change? So all of that whole journey, we use, we create signals out of that and we share that risk report with the insurance company. The insurance company then puts it in part of the underwriting system. Similarly, you know, we use AI in customer service, right? You can use a lot of basic things can be done by bots or you can, you know, improve your system. So I think it's a once in a generation kind of change. I think it would be foolish for people to not adopt it and use it. But I think it is also one where, which is I think the kind of import of your question, that it cannot be used, you know, you cannot blindly trust it. Yeah. Just as one won't blindly trust a human being, right? So I think you have to have that human in the loop concept. And I think with that, you can do a lot of good stuff. Because just as humans have biases, you know, frankly, AI also has biases. Yeah. You have to systematically kind of correct for them. But do you see AI agents becoming underwriters? I think AI is helping to make the process much better. See, underwriting is about large percentage of the people are fine and they go through, right? It's about finding that needle in the history. So, AI is helping you where to look rather than, you know, assuming that all 100 people are the same and treating them the same way. AI allows you to really narrow down on those maybe 5, 10, 15 people whom you need to look at closely. And I think definitely AI will help in underwriting. Our experience so far is that insurance companies are using it as a tool rather than saying, okay, you know, give this to AI and AI will solve everything itself. It's kind of flagging the cases and saying, okay, look at these cases more and these are look fine and you can, you know, go ahead. So, I think that's kind of the nature of the tool and I think that's what it's being used for so far. Do you see, two final questions, do you see the rise of specialist insurers more and more like not not life and term and health but you know just small ones attacking just one segment for example ACCO which is very specialized etc do you see a future for them I think I would say that actually one of the things which was included in the act recently the new insurance act yeah is a concept called MGA which stands for managing general agent and this is actually a very interesting concept which has which needs to be implemented in the country so far it's only been included in the app yeah what an MGA does is it's like an NBFC just like an NBFC is to a bank where a bank has you know the full deposit taking capability etc etc and NBFC can be a specialized capability you can only do gold loans you can have wholesale funding rather than having retail funding etc etc so we believe that this MGA actually is the way to achieve what you were talking about, I think there can be multiple MGAs who could focus on specialized things, right? Like there could be an MGA which focuses on cyber insurance, maybe on pet insurance, home insurance, maybe an MGA which is only for Northeast India or only for Jammu and Kashmir or something. So, I think this MGA is a very powerful concept. I think this should be implemented. Globally, MGAs are actually very well understood and it is the kind of best of both worlds because they have wholesale funding, there is control over them, right? So, insurance company has control. it's a limit you can only write so much business you have to prove that you are doing that you need to have capital of your own to make sure that you know there is skin in the game so I think an MGA can be a very good structure for India and just like you know if you think about financial services in India without NBFCs you know gold loans micro finance many of these niche things would never have happened and I think the same opportunity exists in insurance as well Finally Sarabhbir five years on the biggest growth driver for PB for the industry and one big reform that you expect to happen? I think the biggest road driver for PB and for the industry is building customer trust. This is a business of trust. You are taking money upfront. You are going to give a benefit later, right? So I think trust is the single biggest thing that we have to build. At PB, we are totally saying that we want to serve more customers and we want to provide them the best possible experience, which will build trust. I think that's the thing. I think in terms of reform in the industry, I think we just need more vigorous competition in the industry. I think the industry needs to have fewer, I would say, rules. It should have more principles and it should allow, you know, I would say you should allow all kinds of distribution and insurance companies, MGAs to bloom. Because that is, if you think about India's story, right, all sectors where we've had success have happened because there's competition. Competition forces people to, and I know it's kind of a strange thing for me to say because it will also impact us. But I think competition is the right thing to promote. And that really drives things. It is very hard to regulate your way into really something, you know, very, very big industry. I think what you can do is that you create an enabling environment. You know, UPI again is a great example. It's a protocol. It allows people to function and it, you know, you know, rest is history what it has been able to achieve. I think insurance also needs, we need to build trust. And I think we need to let market forces really, you know, vigorously compete. And I think with 100% FDI, etc. I think, you know, a lot of enabling provisions are there already. Sarabit, thank you so much for joining us. Lovely to have you. Thank you, Anir. That's it for today. You are listening to the latest Corner Office Conversation. It was produced by Vinej Yoshi and Rajas Nayak. Sound designed by Amrit Raji. Keep following our podcasts on your favorite platforms. Stay tuned.