Corporate Newsletter of Bajaj Allianz General Insurance

NEWSTRACKCorporate Newsletter of Bajaj Allianz General Insurance September 2007

Front Cover: Eye of a stormHurricane Isabel over Puerto RicoBy - NASA ImageryImage from istockphotoIssue date: September 2007Published by: Bajaj Allianz General InsuranceEditorial Team:Santosh BalanAjay VarmaPrinted at: Pragati Art Printers, HyderabadBajaj Allianz Newstrack, a quarterly newsmagazine ofBajaj Allianz General Insurance Company Limited,provides current information on the activities of BajajAllianz, India and its affiliates.For further information on the articles and newsappearing in this magazine please contact SantoshBalan at +91-20-66026603or email santosh.balan@bajajallianz.co.inVisit our website: www.bajajallianz.co.inViews / Information expressed herein are illustrative andinformative in nature and not binding on the company. Insurance isthe subject matter of solicitation.Bajaj Allianz General Insurance Company LimitedGE Plaza, Airport Road, Yerawada, Pune - 411006

Changing of the GuardSwaraj Krishnan - CEOGreetings!“ There is nothing permanent, except change”, said Heraclitus, afamous philosopher and author. This prophetic statement holdstrue to what is happening here at Bajaj Allianz as we now standat the threshold of changes. Kamesh takes on the role of CountryManager of Allianz in addition to the responsibility of being theCEO of Bajaj Allianz Life Insurance, taking over from SamGhosh, who moves to Bahrain as Regional CEO of AllianzMiddle East.Kamesh was involved in setting up the operations from scratchand steering the company’s transition from tariff to de-tariffregime. Kamesh’s contribution has been immense and has madethe company one of the leaders in the industry.I look forward to building on this strong foundation of open,performance based and innovative practices instituted by Samand Kamesh during their stints in the company. Our best wishesto both of them in their new roles.Changes have been happening outside the precincts of ourcompany too. In the second phase of detariff, pricing barriers areslated to be removed in all lines except Motor Third Party (TP).The industry is moving towards common minimum marketwordings for these lines. Insurers would then be free to tailorpolicies to match the needs of the insuring public with add-onsetc. to amend the chassis cover being proposed.So how are we bracing ourselves to the new challenges? In thefollowing pages Tapas Mandal and V. P. Sharma discuss thetrends and impacts of discounting in fire and engineering lines,Ajay discusses how we are preparing our employees and channelpartners to face the new de-tariff regime. Rahul and Mihir haveundertaken an extensive mapping exerciseof flood prone areas and discuss what itmeans for our clients. In some of the pastissues of Newstrack, we had talked aboutthe importance of loss minimizationexercises, this time we spoke with a few ofour clients to understand their view on thisexercise. Tapan, who had initiated theconcept of a satellite office in various B &C class towns, discusses the trials andtribulations of this initiative. Sanjayreveals the various steps taken to tackle themenacing racket of frauds in TP claims.Roohi one of our ex-management traineestalks about how her stint at Bajaj Allianzkeeps her in good stead in her new role inan engineering consultancy firm in USA.While the industry continued to grow by15% in August, Bajaj Allianz grew by 33%and the market share grew to 8%. We havedone reasonably well in the last twoquarters. The coming days would be full ofchallenges and unpredictable situations.I wish you all a safe and peaceful festiveseason.swaraj.krishnan@bajajallianz.co.inNewstrack September 2007 3

CONTENTSChanging of the GuardBy Swaraj Krishnan, CEO - Bajaj Allianz General InsuranceOur new CEO's messageFlood MappingRole of Flood Mapping in Management of InsuranceBy Mihir Vohra and Rahul VisputeFlood mapping plays a crucial role in the management of Insurance, and we have conductedextensive studies on flood prone areas. A brief introduction of the work done thus far.TrainingA Continuous JourneyBy Ajay Dasgupta, Sr Manager, L & D - Bajaj Allianz General insuranceAt Bajaj Allianz, we are constantly upgrading our skills, Ajay talks about how the L&D departmentkeeps up with constant training of our staffDetariffing - Fire and EngineeringTrends and ImpactBy Tapas Mandal and V. P. Sharma - AVPs Underwriting - Bajaj Allianz General InsuranceClients' Speak- Loss MinimisationWe have recently carried out loss minimisation studies for our clients. The results have been openlyshared with them and suggestions have been made towards loss minimisation. Interviews with someof our clients on their views of this studyExtending ReachA Successful ExperimentBy Tapan Singhel - General Manager - Bajaj Allianz General InsuranceClaimstrackOur regular showcase of claims made, claims paid and time taken for settlementsUncovering Third Party FraudCaptain Sanjay Moholkar - VP, Claims - Bajaj Allianz General InsuranceStrong FoundationA Stepping Stone To SuccessBy Roohi Ahuja - Ex-employee - Bajaj Allianz General InsuranceInternational Report - A Great Deal of IntoleranceAnother perspective to the Global Warming Debate3568911131416174Newstrack September 2007

Flood MappingRole of Flood Mapping in Management of InsuranceMan’s scant respect for the environment has had adevastating impact on the climate of our planet.Recurring floods year after year, all over the world, havebrought death and destruction to life and propertyaugured by the Greenhouse effect. The situation in Indiais no better if not worse. Even two years after itsoccurrence, residents of Mumbai have vivid memories of26/7, when they witnessed the worst floods in the annalsof the city. The poor infrastructure of most of our citiesto protect life and property and the regularity in theoccurrence of the floods is obviously going to have amajor impact on insurance companies saddled withincreasing claims.This year too the scenario was not different, though theseverity of destruction had reduced. Floods have struckall the major cities with a regular frequency. While partof the problem can be attributed to poor infrastructurepresent in these cities, it is quite clear that this problemhas to be tackled by all possible means.After the 26/7 event in Mumbai and the subsequentexperience in the following year Bajaj Allianz realizedthat the event is of regular occurrence and floods per se,can no longer be dismissed as a one-off events. We did aflood mapping study in most of the flood prone placeslike Mumbai and its nearby areas, Gujarat and AndhraPradesh. The object of the study was to:• Understand specific areas where flood andinundation are repeatedly causing damages and thereasons thereof.• Build enough data to settle claims quickly.• Identify methods of loss control and ways to reduceextent of damage to business insured.• Create goodwill and awareness among our clientsand to reduce their material and financial loss bysuggesting improvements in their operations.When the team set out to do the mapping, care wastaken that most of the industrial areas were included inthe study and the flow pattern of rivers, nullahs(sewerage system) or any water bodies in nearby areaswere all taken into account.The mapping was done after numerous visits to thelocation for inspection, using various meteorologicaldata, tracking the risk prone areas and monitoring thedata on a continuous basis. In addition to this variousmapping software, world weather reports, global floodregister reports which contained locations flooded,duration of flood, cause of flood, amount of loss,flooded river name, areas affected and severity class, etc.were collated and interpolated for the study. BajajAllianz also tied up with various bodies which providenear real time alerts by SMS/Fax/website about naturaldisasters around the world and tools to facilitateresponse co-ordination, including media monitoring,map categories and virtual on-site operations coordinationcentre. Past flood loss history for thatparticular location was also extracted from the claimfiles. Low lying areas were clearly mapped and thelocation’s loss experience was updated. In addition PML(Probable Maximum Loss) for flood was also estimatedfor that location. The risk engineers observations withspecific comments on plinth height, road level and pasthistory of loss was considered. Once this was done, theflood exposure was rated on the scale of low, moderateand high. Even the commodity that was stored in suchflood prone locations was taken into account to checkthe water susceptibility and the commodity wascategorized as cat 1,2 and 3 depending on usage ofcommodity, industry whether chemical orpharmaceutical and also type of storage facility.Newstrack September 20075

Once the mapping was done, the same was shared with our technical team and also our clients. Some of therecommendations of the study for flood risk improvement measures were to:• Ensure that electrical installations do not come in contact with water.• Switch off electric supply to electrical installations likely to be affected by water. If required ask help frompower distribution company.• Construct barrier walls surrounding your property to prevent ingress of flood water.• Check structural stability of your structure before monsoon.• If required contact disaster management cell at your location.• Preserve important documents and valuables like bank and insurance papers, health records, jewellery etc.• Store high value goods at a higher level than low value goods.• Store goods on pallet to increase the height.• This study was an important tool to advise our clients and help them to take feasible measures to minimizethe loss due to floods.With inputs from Mihir Vora, Ahmedabad and Rahul Vispute, MumbaiTrainingA Continuous JourneyAjay DasguptaSr. Manager, Learning and Development“ A change would do you good” said Sheryl Crow.The Insurance Industry in India today has become quite like Twenty-20cricket. No one really knows what to expect. From January 2007, tariffbarriers have been removed. Detariffing brings with itself several challengesand opportunities to grow the market and business. At this point theinsurance industry has very little time to grapple with these huge changes.What would ideally take a few years to implement is being put into action in afew months. In this article, I will talk about how the Learning andDevelopment team at Bajaj Allianz General Insurance is planning to counterthese challenges.Some of the challenges that will crop up are:Constant changes in distribution channelsIn a detariffed regime, we will have to explore newer avenues to reach thecustomer. We will have to discover innovative channels of distribution tomake our products widely available.Varied channels come with variedchallenges. Channel Management is goingto be a huge issue as some will enhanceeach other while others will compete. Forexample, more exclusive and higherservice distribution will generally entailless intensity and lesser reach. Cost has tobe traded off against speed of delivery andintensity.Talent RetentionSome of the major challenges also includedeveloping and retaining the workforce inthe organisation.The expanding market demands a largework force. We therefore, will berecruiting on a continuous basis. By the6Newstrack September 2007

end of this financial year we expect to reach a staggeringfigure of 3,500. Training intermediaries and the entiredistribution force, on the new paradigm will be achallenge. So, how are we going to keep our workforcecommitted and focused?Implications for Learning & DevelopmentWhat has changed is the very nature of the game. It’sfaster, more competitive, the margin for error is lesser,and the learning curve is smaller still. What does all thismean to Learning & Development at Bajaj Allianz?It means:• Building a ‘Value System’ that makes the organisationmore resilient and adaptive in the face of changeI-Lead – U-Lead – V-LeadOur values define our behaviour, our personality andwho we are. Through a series of focused programs,discussions and brainstorming sessions, the leadershipof the company, with support from HR L&D, draftedthe Corporate Values.The Corporate Values are the never changingdefinition of who we are and what we stand for asBajaj Allianz.The V-Lead WorkshopsOnce the Values were defined, the Value BasedLeadership program – V-Lead was designed to helpTeam Leaders and Sr. Team Leaders explore andimbibe the Corporate Values. The aim of theworkshop is to transform Team Leaders to ValueBased Leaders.V-Lead workshops are being conducted across Indiaand the feedback for the program has been quiteamazing.Post the V-Lead workshop, Team Leaders willconduct Value Orientation sessions with theirimmediate teams. The idea is that every individualwho is a part of the Bajaj Allianz General Insurancefamily should understand and imbibe the CorporateValues.• Developing critical Skills and Knowledge that willhelp us remain competitive in the marketSkills Development Programs (eLearning andClassroom Workshops)While Values provide consistency in our behavior,Skills determine our performance. The Skilldevelopment process began with an organization wideSkill Assessment self-test for Team Members.The test helped Team Members understand key Skillsrequired in carrying out their responsibilities and ananalysis of their areas of Strength, Opportunity andWeakness. Over 1000 Team Members took the onlineself-test and now have personalized Skill Gap reports.Other Initiatives:Marketing Skills Development Program -MSDPMSDP has been designed to help Marketing Staffimprove critical Marketing Skills required in the detarriffedmarket. MSDP is a mix of online andclassroom learning programs. While the onlinecourses focus on Product Knowledge and SellingSkills, the two day classroom workshop focuses onbuilding critical skills required to service channelpartners and remain competitive in the de-tariffed era.Over 32 batches of MSDP workshops have beenscheduled across India.Certificate in Principles and Practices ofInsurance - CPPICPPI is a 3 month program designed to provide indepthpractical knowledge about FundamentalPrinciples of Insurance and how they apply to thefield of general insurance. This program is completelyonline and provides learners the flexibility to studyanytime, anywhere, be it at their workstation orhome.For a large majority of our workforce that has had noformal training in Insurance, CPPI provides anopportunity to receive quality learning and training.Finally, I believe that companies that are more agileand can learn faster than others will come outchampions in the de-tariffed market. The T20 WorldCup is ours and the HR L&D team is sure that wewill continue to retain our market position in the newage insurance industry as well.“The illiterate of the 21st century will not be those who cannotread and write, but those who cannot learn, unlearn, and relearn”-Alvin TofflerNewstrack September 20077

Detariffing FireTrends & ImpactTapas Mandal and V.P.SharmaAVPs Underwritingand EngineeringAdministered pricing and a liberalized marketseemed to be quite a paradox. In order to correctthis anomaly and in keeping with global trends,pricing barriers in fire, engineering, workmencompensation and motor insurance were removedfrom 1st January, 2007. In order to ensure a smoothtransition, a two step process was put in place with alimited pricing freedom but no change in terms andconditions and the second step envisaged full detarifffrom April 2008 onwards.Detariff in fire and engineering insurance triggered afree fall in premium rates as insurers offered discountsto the level of 60% - 70% of the earlier rates in theinitial few months. The rates were quoted without anyunderwriting discipline. This indiscriminate pricingdid not reflect the basis for removal of price barrierswhich was to give a benefit to the insurers and thecustomers. It was hoped that insurers would behaveresponsibly. At this point of time the regulator steppedin to rein in the insurers and fixed a ceiling of 51.25%reduction in discounts. This curtailment ofdiscounting stabilized the market for the time being.Buoyed by the response, full pricing freedom is beingslated from November 2007 onwards subject tochecks and balance formulated by the regulator.As a result of the indiscriminate pricing, fire andengineering portfolio shrunk across the industry. Allplayers had a negative growth of almost 40% in thisportfolio in the first quarter which constituted nearly20% of the total premium collection. To most of thecorporate clients, detariff meant just discounts with noor little regard to the risk profile.During the course Bajaj Allianz has been offeringdiscounts that range from 25%-30% on a case to casebasis depending on the risk profile of the customer. Wehave been successful in convincing our clients aboutthe rating factors and the basis of arriving at the rate.The rates have been developed after careful analysis ofthe past claims experience in the respective industry.The frequency of claims were interpolated withnumber of policies, type of claim - whether AOGclaims or otherwise and location of incurred claims onearned premium. Only those industries wereconsidered where more than 100 policies had beenissued in that particular class of industry. Storm,Tempest, Flood and Inundation (STFI) exposure wasstudied separately to consider impact of AOG perilsexposure.This analysis gave us a vital yardstick on the lossbehaviour in that particular industry and provided ameans to arrive at the optimum premium for thatparticular industry.Most of the clients agreed to this without any rancour.However we have had to forego some clients whosought discounts that did not match their risk profile.We have also taken steps to brace ourselves inthe fully de-tariff scenario by:• Training of employees andintermediaries to understand the prosand cons of detariff.• Focusing on other lines of businesswhere the effect of price war is less,like aviation, project insurance, etc.• Cherry picking the business i.e.selection of risks by instillingunderwriting discipline.• Changing the portfolio mix withaccentuated focus on retail segmentto compensate for the shrinkingportfolio of fire and engineering.tapas.mandal@bajajallianz.co.in and v.sharma@bajajallianz.co.in8Newstrack September 2007

Clients' SpeakLoss MinimisationLoss minimisation is increasingly becoming important not only for the client but also for the insurer. Several lossminimisation initiatives by Bajaj Allianz General Insurance have been discussed in some of our previous issues. Inthis issue we talk to some of our clients to understand their response to the loss minimization studies we haveundertaken for them.Tab India GraniteQ1.Tab India Granites, headquartered in Jaipuris the largest integrated natural stonemanufacturer in India. Tab India is 100%Export Oriented Unit (EOU) with aworldwide clientele and has productionunits at Jaipur and Hosur in Karnataka. TabIndia has won several export awards and isa government recognised Export House.Bajaj Allianz manages their entireinsurance portfolio of fire and marineincluding transit. Sumit Gupta MD shareshis views on our loss minimisation initiative.A 1. We appreciate the efforts made by Bajaj Allianz inrespect of loss minimisation case study made at ourplant. Efforts were made to look into all the possibleangles, which may cause material damages. Not onlywas that area of the damage photographed but it wasillustrated during the presentation exhaustively. In myopinion this a good effort made by the company in lossminimisationQ2.Bajaj Allianz had undertaken loss minimisationprogram in your company. Did you find this initiativeof any benefit to your company?Were the suggestions on minimising the lossesimplemented in your company?A 2. We are constantly improving our packing standards butin addition to that we have provided nail guns to theworkers so that improper nailing is totally avoided.Workers have been sensitized on the need for properpackaging, the quality of inward packaging materialslike wood, nails etc. are monitored and theresponsibilities fixed on the managers and theirinspection report made mandatory. "Hygrometers"have been provided to the workers to check theQ3.moisture content on the wood so that right quality ofwood is used in packaging. Although fumigation is aregular process in our packing it is now also beingdone at the factory to avoid fungus formation onwood. We have started providing additionalhorizontal supports for the crates as suggested byyour risk management team.A 3. We are sure that after implementation of all theabove safety parameters, we will be able to deliverloss free consignments to our customers.Q4.A 4. In my opinion it is the right step in loss minimisation.A loss is felt equally by us as it is felt by an insurancecompany. Our products are mostly used in differentstages of construction and in case of loss to materialin transit it is quite obvious that the requiredquantity will fall short. This will disturb the entireconstruction schedule and the entire productionplanning to bridge the shortfall. If not done, we maylose customers which eventually is a greater loss.Q5A 5. I feel that your team should keep us updated aboutthe new techniques in packaging standards for stonematerials.Q6.After implementing the suggestions did you noticeany improvements in your system?Any particular aspect that you would like toemphasize that came out conclusively as a result ofthe study?What are the other operational areas that you wouldlike to be included in the study in the future?How can we as your insurer help in minimising yourlosses in other insurance portfolio?A 6.Your risk management team can always update usfrom the loss experiences coming across from otherrelated industries so that preventive measures can beadopted.Samtel Colour Ltd.Samtel Colour Limited, part of Samtel Group,manufactures picture tubes, colour electron guns,deflection yoke devices and glass parts. They haveproduction units at Kota, Ghaziabad, Noida andParwanoo. Bajaj Allianz manages their fire, marine andmotor portfolio. We spoke with Ajay Sehgal, DGM(Finance, Taxation and Insurance) about our lossminimisation study.Q1.Bajaj Allianz had undertaken LossMinimisation program in your company.Did you find the initiative of benefit toyour company?A 1. Benefit will be to both the parties. If wehave fewer claims, we can look for areduction in rates. Also you will presentlogical and time-tested techniques, whichwill be a value addition to our company.Newstrack September 20079

Q2. Would you like to give any suggestions?A 2. International experts should conduct the study so thattheir reports are accepted worldwide. Ourinternational vendors should also accept the reports.Packaging used for the transit of goods to thecustomer’s should be studied.Q5material in the Godowns or in the open areas. Howshould the goods be covered? What should be theheight of the stack? Should we continue to use theexisting forklifts and stackers?How can we as your Insurer help in minimising yourlosses in other insurance portfolio?Q3A 3. The study should be conducted about the alternatesources of packaging. Today we are using thermocolthat is a use and throw product. You can suggestsomething which can be used for sometime before ithas to be discarded.Q4.Any particular aspect that you would like to bestudied?What are the other operational areas that you wouldlike to be included in the study in the future?A 5. Thermography should be conduced to see if theelectric fittings are over burdened, or if there is anytension in a particular electronic gadget.Q6. Have you yourself taken any initiatives?A 6. Safety audits are conducted on a regular basis. We asa company follow 5 S. We have already implementedthe new safety guidelines given by ISO. We have ateam of trained people and fire fighters.A 4. Study should be conducted for proper storage ofSolvay PharmaSolvay Pharma India limited,headquartered in Mumbai has apresence in three therapeuticsectors viz. Womens' Health,Gastroenterology and mentalhealthcare. Bajaj Allianz managestheir entire insurance portfolio. Wespoke with V. K. Sharma, GM(Commercial), Solvay PharmaLimited and asked him for hisviews on our loss minimisationprogram.Q1.A 1. Yes, certainly. Bajaj did a detail and rational analysisand brought out some interesting facets of our claimhistoryQ2.Bajaj Allianz had undertaken loss minimisationprogram in your company. Did you find this initiativeof any benefit to your company?Were the suggestions on minimising the lossesimplemented in your company?A 2. We plan to soon conduct a feasibility study for each ofthe suggestions and hope to proceed with the acceptedones thereafter.A 3. Bajaj Allianz's presentation is being shared with thetop management as also the relevant functionalheads. We'll take a final decision on each proposal.Q4.A 4. We need to look at packaging improvementpossibilities for two of our products.We need to examine the business on certain routes(including the transporters used) and by furtherstrengthening the compliance at C&F centres withoperating procedures (stacking, etc.)Going forward, we - as a responsible company - needto carefully analyse our claims from variousperspectives (as done by Bajaj), on a continuousbasis.Q5A 5. We plan to work on the present findings first andensure a good improvement before deciding on this.Q6.Any particular aspect that you would like toemphasise that came out conclusively as a result ofthe study?What are the other operational areas that you wouldlike to be included in the study in the future?How can we as your insurer help in minimising yourlosses in other insurance portfolio?Q3What are the steps taken to implement the suggestionsin your company?A 6. We do not have any major claims in any othercategory.10Newstrack September 2007

Extending Reach-A successful experimentTapan SinghelGeneral Manager - Bajaj Allianz General Insurancehe insurance market haschanged over the years andhas grown beyond the metros tomini metros including B and C classtowns, which are emerging as newgrowth centres.Earlier non-life insurance was mostly addressing thecorporate sector which is more insurance savvy to protecttheir bottom line and there was very little emphasis to tapthe retail segment – the consumers. Motor insurance wasthe only product that was targeted at this segment.Health insurance in the form of hospital reimbursementscheme was the next big portfolio which targeted thissegment.With the surge in middle class population, increase invehicle sales and lifestyle changes, the retail segmentsuddenly changed gears and hit the growth path. Theentry of private players has refocused the attention of thiskey segment. The other attractions towards this marketwere –• Virgin marketT• Increase in disposable income• Change in lifestyle of rural India• Media created a lot of awareness amongst suburbanand rural India• Lack of intense competition which is witnessed inmetro and mini metroBesides the above, with the advent of free pricing regime,the focus on retail segment was accentuated. Naturallyone had to fall back on these untapped markets with arenewed vigor. Fortunately Bajaj Allianz had initiated thison an experimental basis as early as 2003 and thelearning had helped us scale up at a much faster pace.How do you reach them?Reaching the diverse and scattered consumers of the retailsegment was often difficult if not impossible for us. In theearly days of our inception, we started with setting upoffices in metros and mini-metros. So we had regionaloffices and area offices to keep a tab on this segment.However we found that though this strategy worked, wewere missing a larger share of the pie from these emerginggrowth centres.Initially we started approaching the customers at theselocations from our hub, but it did not work out for thereason that the insured always wants the insurer to beclose to him/her and in constant personal touch withthem. Moreover we did not have a mechanism to issueany document on receipt of premium. This was notacceptable to the customers at these locations.There was a risk in exploring these emerging growthcentres, but since we are in the risk business, we took acalculated risk. Initially we had a customer representativein some of these centres to gauge, develop and thenconsolidate the market. Some of the customerrepresentatives were not able to do more than justestablishing a rapport with the existing relationships. Butthey were able to at least create awareness about ourcompany and also give us an idea about the market sizeand potential.This feedback and their performance encouraged us todevelop what was to be called a satellite office which wasattached to a hub which was an area / regional office. Thesatellite office was responsible for premium collection,developing distribution channels, besides initiating localtie-ups with motor dealers, and urban or rural coopertaivebanks. The claims and accounting was handledby the nearest area or regional office to which it wasattached.This experiment initiated in 2003 has become successfuland today we have around 70-80 offices in these growthcentres. Most of the area / regional offices now haveseveral satellite offices orbiting around it and has given usthe much needed impetus in growth and penetration. Thecontribution from these satellite offices is nearly 9% ofthe total premium. Efforts are on to increase this to atleast 15%.What were the challenges?We faced many challenges once we embarked on this planto open satellite offices :•Finding a suitable candidate as there was reluctanceto move to up country locations.Newstrack September 200711

• Having a lean but effective structure.• Finding a suitable place to start operations.•• Policy issuance and issuing receipts.•Delegation of authority guidelines for the satelliteoffices.Taking care of petty office expenses without a bankaccount.• How to meet the training requirement.• Internet connectivity without an office.The challenges were immense and so were the solutions.For most of the satellite office heads, it was a trial anderror method to resolve their day-to-day operationalproblems. Almost all the staff started their office in a car,armed with a cell phone as office space was the majorconstraint. Some of them started operating from theirresidence, others used more ingenious methods.In Vijaywada, soon after a tie-up with the leading BajajAuto dealer, the showroom was encroached in the nameof providing training to the dealer staff in issuing policiesfor the 2-wheelers they sold! Slowly almost nine membersof the Vijaywada satellite office occupied the space andstarted operating from their location. “We could do thispurely because of the rapport that we had with thedealer”, said Shyam Sunder, office head of Vijaywada.Some others armed with a laptop and cell phone werelucky to grab a corner in a Bajaj Allianz Life office andrun the operations from there. Other ingenious ones usedthe agency’s or intermediary’s offices to do their routinework.Most of them carried a kit which had documents likeletter heads, envelopes, insurance stamps, company seal,etc. in their own vehicles. Pradeep of Calicut office whostarted as a Customer Service Representative (CSR),explained their typical daily work schedule, “Our daywould begin with visits to the bank to deposit thecash/cheque collected the previous day, then a visit tomotor dealers to service their requirements or forge tieupswith new intermediaries or interview prospectiveagents to build an agency channel. The second half of theday would be at the agency offices or at the cyber cafe,where we scanned the documents and send it to our Kochioffice for policy issuance. The evenings would be at thecourier office to prepare and dispatch the originalproposal forms and other requests.” Looking at theirschedule, most of the time, you would find themensconced in other’s offices or cyber cafes.Some of the other challenges besides office space wasconnectivity and problems in accounting and issuingreceipts for the premium collected. The other was theback office to issue policies, which became serious as thevolumes increased. But then when the business done bythe CSR attained critical mass, they were automaticallyupgraded to the next level and provided with additionalstaff and office spaceWhat drives them?Well amidst all the challenges and the uncertainties, whatis it that drives these people to explore in to theseuncharted territories. One of them succinctly puts it as –“Career growth and the mere challenge to create a marketfrom zero”. Yes, most of them were in their mid-20s tookthe gauntlet and charted out a growth strategy forthemselves and the company.Opening each satellite office was a unique challenge initself and a great learning for all of us. We are happy thatwe were able to open a large number of satellite officeswhich are performing reasonably well and are growingconsistently.LearningsWhile the spirit of adventure and entrepreneurial skillswere the driving force for these young people to board thesatellite office bandwagon, there was couple of importantlearnings from this exercise. One of the key learning is todevelop a manual for such operations. This manual is togive a process to the whole exercise and ease the burdenof the new challengers so that there is no longer a trialand error method. This will help them to quickly replicatethe success of the other locations.Most of the satellite offices started with one to twopersons and have now grown to over 25 people.tapan.singhel@bajajallianz.co.in12 Newstrack September 2007

CLAIMSTRACKNewstrack September 200713

Uncovering Third Party FraudCapt. Sanjay MoholkarVP ClaimsFrauds in Third Party (TP) claims have been increasingday by day. Such rackets are active in almost all parts ofthe country. The people involved in the racket are usinginnovative methods for claiming under the provisions ofMotor Vehicle Act, which in legal parlance is called associal beneficial legislation for the victims of RoadTraffic Accident (RTA). This is a serious crime oftencommitted by the white collared people wherein theymake a fortune out of somebody else’s misfortune.Technological developments are being put to such awrong usage that at times, it forces one to think -whether it is a boon or curse?Insurers need to be more innovative to bring thesefrauds to the notice of all concerned, then only will it bepossible to defend them and avoid the drain on publicfunds.Some common type of frauds in TP Claims observedover the years are –• Fake FIR.• Fake Driving License, Bogus endorsements onDriving licenses.• Fake/Fabricated/Inflated Medical Bills.• Change/Replacing of Driver, or same driverinvolved in multiple accidents.• Natural deaths converted to accidental death onroad due to vehicle hits.• Non-Traffic Accident converted into Road TrafficAccident (RTA), Suicidal cases or natural deathcases shown as accidental deaths, Adding entries inMLCs or police papers for persons not involved inaccident.• Change/replacing of Vehicle, Showing involvementof vehicles having insurance or addition of vehiclesin Hit and Run cases.• Two cases filed for the same person.• Fake/Fabricated Cover Note or Policy.• Passengers of Goods Vehicle shown as pedestrians,or unauthorized passengers in goods vehicle shownas owner of goods.The racket often includes the claimant, claimant’sadvocate, hospitals, doctors, owners of vehicles andeven the police are equally involved in the fraud /fabricated cases as it would be difficult to get awaywithout their help. Sometime they manage to make acase in such manner that it becomes so perfect that theiridentity often remains undisclosed.We at Bajaj Allianz take these frauds seriously as theyare not only vitiating the society but also putting thepolicyholders’ money at risk. Our endeavour fordefending such cases before courts or tribunals is tobring it to their notice that such frauds if allowed to becontinued are a drain of public money which ultimatelyresults in increase in cost of third party premium due toincreased pay outs for such claims.When a TP claim is received at our office, we follow thesteps below :• Carefully scrutinize the claim petition, investigationreport, police papers, medical documents and allother relevant documents .• If we suspect that there is something unusual we diginto the matter to know the real facts of the case.• If required we reinvestigate the matter on specificissues and ask the investigator to bring on recordcertain documents which are necessary todistinguish the fake one.14Newstrack September 2007

• When there is a suspicion, we check the Claimantsdocuments with the certified copies brought onrecord by the investigator to verify if there is anymanipulations or not.• On a thorough investigation at the time of TPClaims, if it is revealed that the story given in theclaim form is not correct or the driver is changedfor the sake of claim or insured has suppressedmaterial facts, a legal notice is sent to the insuredfor manipulation / cheating and we ask him to payback the settled amount.• At times we also put pressure of filing a criminalcomplaint and most of the times they relent andwithdraw the claim if it is a fake one.• Considering the competition in the market andrules framed by the authorities we have to settle‘Own Damage Claim’ within certain period oftime. We assess the loss, check the story given bythe Insured in the claim form and use it to settle theclaim after getting certain clarification if required.1. Ghost Car in Kolkata – Here a fictitious car is usedto dupe the insurance industry and the amount sofar disbursed is over Rs.1 crore.2. Fake FIR scam in Salem.3. Strict abidance of provisions of Section 158 (6) ofMV Act by all concerned like police authoritiesshould inform the insurer and the nearest tribunalabout the RTA victims.4. We have agreed to share the additional cost ofinvestigations through CB_CID Forum establishedfor reinvestigating such fraud matters as they haveexpressed reservations for doing this work due toshortage of funds for office infrastructure andadditional costs involved.We also involve advocates by holding seminars or meetsand thereby explaining the nuances of TP claims andrelated frauds.• We have been successful in getting back money paidtowards Own Damage claim of vehicles in manycases where it was found that insured hasmisrepresented the facts about name of the driverby showing fear of criminal complaint and in fewcases money has been recovered even after lapse ofmore than an year when things were revealed at thetime of lodging of TP claim.• On intimation we appoint an investigator withspecific instruction to investigate the matter and ifan investigation of Hospital Records (admissioncard, wound certificate, case papers etc.) revealsthat a non-traffic accident was converted into RoadTraffic Accident or the rider of the vehicle wasshown as pillion rider etc. we take proper plea,produce proper documentary evidence and call theproper witness before the court to prove our case.In few cases the court has dismissed the case andgiven liberty to us for filing criminal complaintagainst the culprits.The defense and line of action in most of the casesdepends upon the facts and circumstances of each case.There are instances where we have along with otherinsurance companies jointly filed complaints andinitiated action to check the menace of fraud .Some of the following cases have the entire industryfighting against fraud:Newstrack September 200715

Strong FoundationA Stepping Stone to SuccessRoohi AhujaEx-employee - Bajaj Allianz General InsuranceIt has been a year and a half since I left Bajaj Allianz Generalinsurance, corporate marketing, Delhi RO and came to USA. Ayear ago, I started working as an Account Manager with anengineering consultancy firm providing networking solutionsto cellular carriers like Verizon Wireless, AT&T, Sprint Nexteletc. This has been a completely different sector; a highlytechnical field, an entirely different market and workenvironment. My work involves building relationships withclients, procuring new projects and ensuring timely completionof projects within defined time lines. I assumed the role of amanager with the responsibility of a team of technical staffand defining the projects terms to ensure the projects get donein a cost-effective manner.I joined Bajaj Allianz back in July 2003 as a managementtrainee, when the sector was very nascent, just privatised andstill dominated and reigned by insurance gurus and veteransfrom public sector companies. Bajaj Allianz, true to its spirit ofexperimenting was one of the first private insurers toencourage a new breed in this sector. A breed of non-domain,young, fresh graduates who didn’t know what insurancemeant!Bajaj Allianz General Insurance, a company which had 300employees in 02-03, grew to have 1200, four times the size in amatter of 3 years, a company which had Rs. 300 crorepremium in 02-03 became a Rs. 1000 crore company in 3years, a company which had “Who we are” as a slide in theircorporate presentation started selling itself as a brand in 3years time. For me the best part of all this was that I was apart of this growth and I feel proud at having contributed tothis accelerated pace of growth!The management trainee batch, 20 fresh graduates from B-School underwent an extensive training to understand thedynamics of insurance and market scenario. We had expertsand top management keenly participating in our developmentand understanding before we were sent out to differentlocations. The training encompassed class room lectures, reallive case-studies, role-plays, behavioral lectures and off-sitetraining. In-all it was a great experience which set the pace forthe years to come.I spent my next 3 years in the company working in one of thebiggest markets of India: Delhi RO, an office that had a pulseof its own, an office that taught you “don’t find faults, findremedies”. At that time, things were shaping up for the entireindustry; privatisation in the sector was still a novel conceptand was not readily accepted by the customers and thechannel. But it was sheer grit and resilience of the companyand its employees which turned the tables and took thecompany to new heights. From being a centralisedorganisation, Bajaj Allianz became a completely decentralisedone in order to reduce the TAT to serve the customers betterand effectively. If you had an idea, you had the capability; youcould implement the same the very next day - that was thekind of independence all the employees enjoyed. The Companybelieved in delegation and in a flat hierarchy, both in letter andspirit. This helped all of us to grow rapidly without anystumbling blocks and unnecessary delays!Today I feel motivated to write this because it has been a greatexperience to be associated with this organisation from thestart, seeing it react and adapt to the market dynamics rapidly,becoming a leader in its domain in a short span of time. Iworked with corporate marketing group as Assistant Managerwith the responsibility of not only generation of premium andsales but also looking at the business as a whole in terms ofprofitability, claim experience and complete insuranceportfolio. This approach of looking at the portfolio from allaspects on insurance rather than just premium is encouragedat all levels of employees. I learned so much about MIS in thisorganisation of making reports of business done, profitabilityreport, budgeting for the team, target setting for the year.Having been an integral part of a hugely successful tenure withBajaj Allianz has given me the confidence and the ability andto carve out a similar future in my current engagement.I have come to realise how much I have grown and learned totake responsibilities, make decisions, manage a team, providesolutions to problems faced and find a way out of situations. Igreatly attribute my learning and my performance todaybecause of a strong training foundation with Bajaj Allianz!Bajaj Allianz has been the ideal training ground, a steppingstonefor a great career in future. I have deeply imbibed thephilosophy of my parent organisation that “Knowledge has tobe improved, challenged, and increased constantly, or itvanishes”.“Before everything else, getting ready is the secret of success”– Henry Ford16 Newstrack September 2007

This article is reprinted with permission from Allianz Journal - 2/2007Newstrack September 200717

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EventsLaunch of JKB Home SecureH. A. Drabu, Chairman and CEO of J & KBank in the presence of Kamesh Goyallaunched a co-branded product – JKB HomeSecure on 24th August 07. This product -JKB Home Secure is a customized productdeveloped exclusively for the bank customerskeeping in mind the needs of people inJammu & Kashmir. The product coversearthquake and also covers the householdcontents on a first loss basis which takes careof underinsurance. With the three planoptions, the customers also get the variety tochoose what suits their needs best at theright cost. J&KBankhasabancassurancetie-up with Bajaj Allainz since 2002.Allianz Capital Markets DayKamesh Goyal was invited at the Allianzheadquarters to share the success story ofBajaj Allianz companies at the annualanalysts meet in Germany. The analysts meetcalled Allianz Capital Markets Day held byAllianz annually where some of the topanalysts in Europe assemble. This year it washeld on 11th July at Frankfurt.