Smarter Planet

Leadership Series

Reliance Life Insurance:

Transforming distribution to bring
security within reach

C. Mohan, Chief
Technology Officer,
Reliance Life
Insurance Company
Limited

Its been about a decade since India privatized its life insurance
market. And sometime during that span of time, Mumbai
resident C. Mohan took out a life insurance policy. So did
some 60 million of his countrymen. While their stories vary, the
acquisition of life insurance touchedand perhaps changed
each of their lives in a positive way. By reducing the financial
risks to their families, they secured more control over their
future and gained more peace of mind in the process.

Leadership
Spotlight

Thats certainly true of C. Mohan. But his story has an even more far-reaching
impact, one with the potential to change millions of lives. For in addition to
being a life insurance policyholder, Mohan is also the Chief Technology Officer
of Reliance Life Insurance, one of the fastest-growing providers in the market.
Mohan came to Reliance from outside the insurance business, giving him an
outsiders perspective and, with it, a fresh eye for spotting opportunities to
change the business. Ultimately, it was his own firsthand experience in
buying life insurance that gave him the idea for a new way of selling it
in the Indian market.

How Reliance Life

Insurance got smarter

When C. Mohan took on the

job of CTO for a small entrant
into Indias newly privatized life
insurance market, he brought
with him a transformative vision
on selling life insurance to the
masses. On the strength of that
vision, Reliance is on a fast path
to market leadership.

Reliance launched a
comprehensive self-service portal
solution called Lifeline which has
lowered operational costs by
30% while making the customer
experience more streamlined and
transparent. More importantly, the
solution enabled Reliance to evolve
its business model in a way that
positioned it for a broader base of
market growth than its competitors.
For the company, this new strategy
has led to industry-leading growth
and a dramatic increase in market
share. For the rural citizens who
now find life insurance within reach,
it promises a life of greater security,
control and peace of mind.

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The seeds of change

The experience of buying life insurance exposed Mohan to the convoluted and manual processing
that characterizes Indias budding market. From his buyers perspective, Mohan was struck not only
by the length of the process but also by its opacity and dependency on a hard-to-track, paper-based
workflow. His problem-solving instinct kicked in, and he came up with the rough parameters for a
more automated and intelligent distribution model built around the concept of smart self-service. But
Mohans idea did not become reality until he came to Reliance five years ago.
Attracted by challenge and opportunity, he entered a freshly deregulated industry that was in full
growth mode and a company that was starting out in a field already crowded with competitors.
To achieve its goal of becoming a market leader through rapid growth, Reliance sought a truly
differentiated strategy, one that would position it to profitably address markets and segments that
its competitors could not. Thats where Mohans idea for an intelligent self-service platform entered
the picture.

The benefits of Reliances

low- cost, self-service
business model
4x increase in market share from
#11 to #3 provider in the Indian
private life insurance market.
Greater than 50 percent reduction
in time required to develop new
services and features.
30% reduction in operating costs,
enabling the distribution of lowcost policies to rural, low-income
households.
Avoidance of millions of dollars in
capital expenditures due to
lessened requirements for branch
and call center build-outs.

A new path to growth

In the first phase of market growth immediately following privatization, the vast majority of Indias
new insurance customers came from its most populous cities, commonly delineated as tier 1 and
tier 2. While to a large degree this reflected the simple fact that more people meant more potential
customers, a more complex dynamicinterweaving Indias demographics with the economics of
offering life insurancewas also at play. Those manual, paper-intensive processes discussed above?
Theyre costly and require investments in branch infrastructure to carry out. For these investments
to pay off, providers need not only to generate more volume, but also to sell the higher-value policies
that city dwellersby virtue of their higher average incomecan better afford than can residents of
Indias smaller cities, towns and villages.
Reliances breakthrough occurred when it came up with a business model that could profitably
deliver life insurance to an enormous market segment that had thus far been beyond the reach of
life insurance providers. While Reliance would continue to rely on its extensive branch network in
denser urban centers, an advanced self-service delivery platformthe first of its kind in India
would provide the low-cost distribution capability needed to profitably tap the vast but far-flung
rural market. In this way, Mohans vision provided the foundation of Reliances strategy for achieving
market leadership.

Betting on a new model

Before Mohan took his idea to Reliances CEO and Board of Directors, he worked with his IT
team to create an initial blueprint of the solution to demonstrate its capabilities. While they were
all completely thrilled with the concept, the only question in peoples minds was whether it could
actually be executed, since nothing like it had yet been done in the Indian market, says Mohan.
That meant there were no benchmark or proof-of-concept studies we could turn to. In the course
of deliberating, Reliances key stakeholders recognized that the benefits of breaking new ground
would be inevitably matched by the dangers of taking risks. However, when Mohan presented a
business case that compared the capital and operating costs of growth through physical channels
(such as the cost of branches and call centers) to his proposed self-service model, the evidence to
proceed proved overwhelming.
The availability of real-time information is a cornerstone of Reliances strategy; its enablement was a
key challenge to Mohan and his team. They accomplished it by creating real-time linkages from core
systems to an operational data store, which serves as a common base of informationthe single
source of truthfor all of Reliances channels. On that foundation, Mohan and his implementation
team used a modular, Web services approach to create a portal-based, self-service solution known
as Lifeline.

Leadership is:

Making the case

When C. Mohan brought his
idea for low-cost, self-service
distribution to Reliances Board
and CEO, he was, in effect, asking
them to make a leap of faith,
since nothing like it had yet been
done in the Indian market, says
Mohan. By focusing not only on
top-line growth but also on big
CAPEX and OPEX savings, Mohan
made a strong case for low-cost
distribution as the key to profitable
long-term growth.
C. Mohan, Chief Technology
Officer, Reliance Life Insurance
Company Limited

While they were all completely thrilled with

the concept, the only question in peoples
minds was whether it could actually be
executed, since nothing like it had yet been
done in the Indian market.

What makes Lifeline special isnt just the fact that it delivers all the core functionality of its branchbased operationsfrom application to claims processingthrough a rich yet straightforward online
experience. Its also the fact that Lifeline delivers capabilities that go well beyond the traditional
experience. For instance, something as simple as knowing the current status of a life insurance
application has always been a challenge for providers under the traditional model due to the
convoluted flow of paperwork across the enterprise and the consequent difficulty and amount
of time required to track down information. Days or sometimes weeks can elapse as customers
ask questions of their agents, agents call branch offices, the branches call the corporate office,
and the corporate office determines which of its multiple departments is holding the necessary
paper document. By enabling customers to get an up-to-the-minute report on the status of their
applications or claims through the Lifeline portal, Reliance delivers a level of information transparency
thus far unseen in the Indian life insurance market.

Lessons learned:

Show the sales benefit

Realizing that the key to selling
Reliances LOB audience on the
new model was speed to market,
Mohan focused on the reusability of
modular IT services enabled by the
use of an SOA approach to designs.
In a hyper-growth market [like India],
the ability to get a new offering to
market in half the time can translate
directly into greater market share,
says Mohan. That made the
benefit of SOA something everyone
on the business side understood.
C. Mohan, Chief Technology
Officer, Reliance Life Insurance
Company Limited

Intelligence guides growth

In reaching out to Indias underserved rural markets, Reliance realized that while low-cost, low-touch
distribution was essential, it was equally important to have a product portfolio that aligned to the
needs of economically and demographically diverse segments within those markets. Reliance has
been able to achieve this by analyzing the customer and segment information stored in the data
warehouse that underpins the Lifeline solution and determining which mix of products, options and
features are optimal for specific geographies or customer segments. With the Indian market in highgrowth modeand first-time purchasers largely driving that growthReliances insights have helped
the company target the sweet spot of the market, and thus fully capitalize on the opportunity.
Mohan sees intelligence as becoming even more important as the market begins to mature and
existing customers seek to complement or broaden the services in their portfolio by purchasing
additional insurance and financial products. We are currently putting in place a predictive analytics
capability that will help us determine the best cross-selling and up-selling opportunities among
different segments, Mohan explains. This will enable us to not only allocate our marketing resources
more profitably, but also maximize the satisfaction of our customer base, which will increase our ability
to retain them over the long term.
Reliance Life Insurance:
The parameters of
intelligent self-service
distribution
Instrumented
The Lifeline portal solution is
integrated with Reliances core
insurance systems in near real
time, ensuring accurate and
consistent portal data.

Interconnected
The portals real-time integration
with core systems provides
agents with a unified, crosssectional view of their customers
portfolios.

Intelligent
Analyzing customer and segment
data gives Reliances product
developers and market planners
insights into how to create and
optimally bundle product offerings.

We are currently putting in place a

predictive analytics capability that will
help us determine the best cross-selling and
up-selling opportunities among different
segments. This will enable us to not only
allocate our marketing resources more
profitably, but also maximize the satisfaction
of our customer base, which will increase our
ability to retain them over the long term.

The payoff of rapid growth

Reliances Lifeline self-service portal

solution is

The most stunning indicators of the success of Reliances strategy are its market-leading growth
numbers, which have propelled the company to the number three position in Indias private insurance
market. At 21 percent, Reliances revenue growth over the last four years has been nearly double that
of the industry as a whole. The company reached the five million subscriber mark (since grown to
seven million) faster than any other company before it. Whats more, based on the most recent market
share numberswith Reliance registering a record high 15 percentthe company is on track to
reach its goal of being Indias number one private life insurance provider.

Framework

To a large extent, Reliances market success is a testament to the effectiveness of its low-cost
distribution models as well as to the technology investments and process changes that made it
possible. Indeed, the fact that Reliance was able to reduce its operating costs by 30 percent as a
result of the initiative made all the difference in its ability to reach rural customers with smaller value
life insurance policiesand in doing so, extend financial security to places where it thus far had
been scarce.

IBM Insurance Industry Framework

Software
IBM WebSphere Business Modeler,
IBM InfoSphere DataStage, IBM
WebSphere Integration Developer,
IBM InfoSphere QualityStage, IBM
WebSphere Portal, IBM WebSphere
Process Server, IBM WebSphere MQ,
IBM DB2

Services
IBM Global Technology Services
Integrated Technology Services

You may have noticed that Reliances rural insurance strategy has a lot in common with the
burgeoning microfinance industry, whichthrough the provision of very small loans to people
who had no access to them beforeis also bringing stability and opportunity to the masses.
To Reliance, this association is more than just conceptual. To help reach the low-income, rural
population in tier 3 and tier 4 cities and towns, Reliance is partnering with microfinance
institutions, nongovernmental organizations and similar groups to get the word out and help
educate people on their life insurance options.
Maybe its because Mohan, a current resident of Mumbai who grew up in Chennai, has never lived
in a rural village. Or maybe its because he has plenty of relatives who live in villages and have never
heard of life insurance. But whatever the reason, Mohan was committed to bringing the opportunity
for life insurance to places that had been beyond its reach before. A central part of our vision is to
reach out to the poor and low-income masses in India, says Mohan. The fact that weve been able
to empower these people through an innovative idea has proven to be one of the most personally
rewarding things Ive ever done.

For more information

Please contact your
IBM sales representative or
IBM Business Partner.
Or visit us at:
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