How Reliance leverages Vehicle Insurance Data to minimize Financial Loss and maintain a Competitive Edge

Overview

Reliance General Insurance Company Limited (RGICL) has firmly established itself as a leader in the Indian general insurance market, known for its innovative solutions and customer-centric approach. Since its inception in 2000, RGICL has been committed to providing comprehensive and reliable insurance products tailored to meet the diverse needs of its customers. FY2022-23 was a landmark year for RGICL, as it crossed the significant ₹10,000 crore milestone in Gross Written Premium (GWP), reporting nearly 10% growth to reach ₹10,340 crores compared to ₹9,410 crores in FY 2021-22. This robust financial performance reflects the company's disciplined risk management and adaptability to changing market dynamics. RGICL's extensive reach, with over 139 branch offices and more than 28,900 intermediaries, is complemented by a multi-distribution model that includes Bank insurance, Agency, Broking, Direct Channels, and Digital tie-ups. The company's diverse product portfolio includes popular motor insurance plans with extensive coverage options and a high claim settlement ratio, supported by a vast network of cashless garages.

RGICL's vehicle insurance offers comprehensive coverage including third-party liability, own-damage cover, and a range of add-ons like zero depreciation and engine protection. The company has embraced digital transformation, offering customers the convenience of purchasing and managing policies online. Recognized for its excellence with awards such as the 'Best General Insurance Company' at the ABP News-BFSI Awards in 2019, RGICL continues to drive growth and excellence, backed by the dedication of its employees and the unwavering support of its shareholders.Now, let's dive into some insights (just for learning purposes!) on how Reliance General Insurance might analyze their data to better understand their Insurance practices.

About Dataset

Let’s Inspect our dataset.The vehicle insurance dataset contains (35067 rows and  65 columns) providing information about dealer, insurance policy, consumer, vehicle, financial, tax and registration.

1. Dealer and Consumer Information

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2. Vehicle Details

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3. Policy Information

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4A. Premium Details

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4B. Coverage Liability and Taxes

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5. Payment Details

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6. Insurance Package and Financing Information

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7. Vehicle Registration and Pricing

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‍Dealer Information Columns

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Policy Information Columns

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Consumer and Vehicle Details Columns

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Premium and Coverage Columns

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Payment Details

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Insurance Package and Financing Information Columns

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Vehicle Registration and Pricing Columns

How Reliance General Insurance Uses Vehicle Insurance data

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To start with the analysis of insurance sector, it is necessary to follow the 4 factors of Data Analysis and that are : 

1. Identify the users or stakeholders for the analysis.

2. Design Empathy Map to define Users' Goals and Challenges or pain points.

3. Identify Metrics or KPIs Matter the Most.

4. Understand the Objectives and Goals.

5. Ask Business Questions

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I know it looks a bit overwhelming, that's why in this article, we'll lay the foundation for a top-notch insurance analysis.

Step 1: Identify the users or stakeholders for the analysis

Define the User or stakeholder  who will use the vehicle insurance analysis data story. In our case, We’ll use an Insurance Manager. Recognizing their diverse needs, challenges, and priorities becomes the cornerstone for tailoring an effective data story. 

User Persona: Business Analyst

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Responsibilities:

• Assessing and managing risks associated with insurance policies.
• Developing and implementing insurance strategies to minimize financial loss.
• Evaluating and underwriting insurance applications.
• Overseeing claims processing and ensuring timely settlements.
• Analyzing market trends and competitor offerings to stay competitive.

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Needs:

• Access to comprehensive data on insurance claims, policyholders, and market trends for analysis and decision-making.
• Tools for risk assessment, underwriting, and claims processing.
• Regular updates on policy performance, claim status, and market dynamics.
• Training and resources to stay updated on changes in insurance regulations and industry best practices.
• Collaboration with actuaries, underwriters, and claims adjusters to effectively manage risks and claims.

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Challenges:

• Balancing risk assessment to determine appropriate premiums without pricing out potential customers.
• Handling complex claims and ensuring fair and timely settlements.
• Adapting to changes in insurance regulations and compliance requirements.
• Competing with other insurance providers in a crowded market while maintaining profitability.
• Addressing fraudulent claims and ensuring the integrity of insurance processes.

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Step 2: Design Empathy Map

To truly connect with the experiences and expectations of Business Analysts, the creation of an empathy map is invaluable. This visual tool allows for a deeper understanding of the emotions, aspirations, and pain points of users. 

By empathizing with their perspectives, we can design a data story that not only meets functional requirements but also resonates with the human elements of their roles.

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Step 3: Identify the Key Performance Indicators (KPI’s)

The heartbeat of any analysis lies in KPI’s and their Metrics. It's crucial to identify the KPIs that matter most to achieving the defined objectives and by focusing on the most relevant metrics, organizations can gain actionable insights into their insurance policies. 

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Step 4: Understand the Goals & Objectives of User

Now, on the basis of Empathy Map and KPI’s, we need to define our goals and objectives of the Users. So, that it will align with the data story functionalities to ensure decision making. Here are the Key Objectives & Goals :

Objective : 

Enhance portfolio performance by targeting high-value segments and refining risk assessment models. Utilize customer feedback to enhance product offerings and service quality, aiming for higher satisfaction rates. Strengthen team leadership through continuous training and mentoring, fostering innovation and collaboration to achieve performance goals.

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Goals : Drive portfolio growth by increasing policy creation volume, enhancing conversion rates, and boosting policy renewal rates for premium revenue growth. Foster a high-performance culture within the team through skill enhancement for agents and analysts. Ensure strategic alignment with broader business goals by synchronizing team activities.

Step 5 : Ask Business Questions

Beyond KPI’s, organizations must engage in business-driven inquiry. This involves asking strategic questions that directly align with overarching business objectives. 

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1. What is the trend of policy creation over the time? Monthly and Yearly?
2. What is the total insured value yearly?
3. How are the average gross premium and policy counts across different policy types?
4. What is the distribution of policies by zone?
5. How can the gross premiums be compared across different states?
6. How are different brands in terms of average insurance premium?

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Q.1. What is the trend of policy creation over the time? Monthly and Yearly?

• Metric: Policy Count, Year , Month
• Observations: some text
  • In 2021, the number of policies created spiked up and In 2022, it decreased very badly and started increasing after that. 

Q.2. What is the total insured value yearly?

• Metric: Total Insured Value, Year
• Observation:some text
  • There is not much difference in total insured value of vehicles. Although the number of policies created in 2021 spiked and dropped in 2022, the difference is minimal.

Q.3. How are the average gross premium and policy counts across different policy types?

• Metric: Average Gross Premium, Policy count
• Observation:some text
  • In terms of average gross premium, ‘New’ vehicles are leading the chart followed by TP Renewal and NTP Renewal, while in terms of counts, ‘TP Renewal’ leads the chart followed by New and NTP Renewal.

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Q.4. What is the distribution of policies by zone?

• Metric: Policy Count
• Observations:some text
  • The South region has the highest share of policies created with 22.2%, followed by West, North, Central and East, while regions of North-East and Islands contributed very less.

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Q.5. How can the gross premiums be compared across different states?

• Metric: Gross Premium
• Observation:some text
  • Average gross premiums across states are quite similar but states like Gujarat, Karnataka, Uttar Pradesh, Haryana, Maharashtra, Telangana had the large value as outliers.

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Q.6. How are different brands in terms of average insurance premium?

• Metric: Insurance Premium
• Observation:some text
  • In terms of average insurance premium, Nissan, Toyota and Honda are the brands with high values. Hyundai had taken the last place for average insurance premium.

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Conclusion:

 With this analysis, we can understand the general overview of the vehicle insurance industry in India. As we can observe, the number of policies changed over the years, with a spike in 2021 and dip in 2022, but that had minimal effect on total insured value. Further, we analyzed how different regions and states are contributing to the overall sales of insurance policies. In addition, we analyzed the average insurance premium across different brands in our dataset to get an idea of brands positioning.

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