HDFC Life Deploys Business Intelligence Solution to Improve Customer Retention by 18%

The company implements Qlik Insights Business Intelligence solution to improve customer retention and saves over USD 200,000 in operational efficiencies across functions, among other benefits.

HDFC Life (short for HDFC Standard Life Insurance Company Ltd), celebrated a decade of excellence in business in the year 2010. But the year was a year to forget for the life insurance industry in India. The industry was just recovering and limping back after the global melt down which had hit the world. This industry saw a lot of uncertainty in the market, largely due to the spate of regulations released by the Insurance Regulatory and Development Authority of India, especially its amendment of the unit linked guidelines and the release of regulations related to the treatment of discontinued unit linked policies. There was no scope for sub-optimal performance and lower efficiency. While the industry faced challenges, HDFC Life had their own share of internal challenges as far as information management was concerned. For instance, CSAT scores were heading southward, while the cost of operations was heading steeply northward. The existing infrastructure could not respond fast enough to challenges, and the cost of information & time to information was high.  The risk of “silos” proliferation was there, and in addition, at the operational level there was limited scope to gain perspective of the big picture and to analyze data to impact business processes.

The top management needed to know something which was unknown rather than simple facts which only confirmed the gut. The sales fraternity was confused with either too much of raw data or no data at all. The strategy group demanded information which would aid to sense change, adjust, and take advantage of unexpected opportunities

The Implementation

For business continuity and to tide over the challenges cited above, there was a subscription from the top management for Business Intelligence on a limited budget. The project was to be implemented for all functions and all the sales channels other than Actuaries, Investment and Finance. In a competitive environment it is vital to raise barriers for exit for channel partners and enhance stickiness with the company.

The company needed a cost effective tool which would support faster and better solutions to tackle the challenges. Thus, they zeroed in on Qlik View 11 as the right BI tool and named it Qlik Insights @ HDFC Life. Qlikview uses in-memory technology to deliver performance. This performance gain is mainly in two areas:

(1) Great user experience as they perform ad-hoc analyses, on-the-fly aggregations and drilldowns.

(2) Data compression of leads to the entire data set being 20% of the size of the source data speeds up data integration processes and reduces storage needs.

User based information/data need analysis was performed in collaboration with the stake holders and basis the rank, data/information of tactical to strategic importance was made available for consumption. The implementation leveraged on existing sources of information, with the primary source being Consultant Corner, a portal which served as a repository of data for the first/second line leadership and ranks below which extended up to middle management roles, specific middle management roles of importance and ranks above up to the CXOs, the information need suggested access to Qlik Insights.

Apart from the action oriented dashboards and push data, they built capabilities around Pattern Detection, Association Rules: Causative & effective for detection of patterns of affinity or cohorts; Discovering hidden relationships: Cohorts study; Predictive models; and Clustering: Granular study.

The following modules were used in the BI deployment:

•   Customer experience analysis - EWI (Early Warning Indicators)

•   Customer insights – EWI, segment analysis

•   Fraud prevention and analysis - EWI

•   Marketing targeting / decision - Segment analysis

•   Customer life cycle management - Customer Life time value

•   Operations improvement - Manage Lean cell, TATs measure

EWIs is a predictive model which aids to alert about the quality of sales and customer acquisition. It is able to predict based on what you have logged in today, the probability of losing the policies to any of the value destroying events. With this module, you can see a trend emerge in a region or a channel where there is higher incidence of “misbehaviour” in terms of quality of sales and so the organization can zero-in and try and correct the issue right then.

The solution can also publish over 16,000 reports to support the sales line function with real time information of business movement. This included a daily report which exhibited Target Vs achievement of Channels flowing down to the middle management levels, an online ETL batch jobs to alert the line function of underwriting fulfilments to reduce the TATs of proposal to policy life cycle, and many more. The projected is expected to deliver positive results for the next 3 years.

Challenges Faced

The challenges did not come in any new indifferent form and were a mix of the usual suspects: resource crunch, cultural change in terms of elimination of silos, the then architecture not conducive to any major development, etc.

Benefits Gained

With this BI solution deployment, the company managed to reap benefits in excess of USD 600,000 in terms of cost optimization on human resource, and other modes of development within the organization. They saw enhancement in customer retention by 18%, a big leap in their customer satisfaction score at 7 basis points, and drastic reduction in TATs thus ensuring service promises being delivered without much exception. For instance, there was reduction in overall TATs for policy life cycle from 21 days to 16 days etc.

The repeat purchase by customers was up by 27% and the market share was up by 50 basis points since 2011. The enhanced review of customer service led to positive CSAT scores by over 7% points. Also, improved efficiencies in a variety of functions led to savings of over USD 200,000. They recorded best in industry persistency of 74% and reduction in pendency by over 34% - which knocked off another day from the end-to-end value chain.

In long term, this will help them revisit actuarial risk assessment and support better pricing for the customer. In addition, they were able to enhance their channel partner/distributor stickiness with best in class service on data/information management and support. On revenue terms the business benefit from the Business Intelligence initiative has been in excess of $600,000.