Surfing The Pandemic Wave In A Savings Led Economy

“We do believe that digital innovation is not a choice anymore. Technology and data will be key for driving new business, customer service, claim payouts and risk management,” explains HDFC Life’s Chief Financial Officer, Niraj Shah.

The evolution of the role of the CFO is not merely a response to the pandemic. The ability to gauge risks and strategies for contingencies are as old as the business landscape itself. The Pandemic is but a newer challenge of international impact and global attention. While the level of impact varies with sectors and domains, the CFO arsenal for defence has remained rooted in agility, crisis management and digital adoption.

Interacting with BW CFO World, Niraj Shah explains how a timely digital adoption, cost prudence and dynamic preparedness has helped HDFC Life brave the pandemic.

Edited excerpts:  

Post the pandemic, how has your role as a CFO changed?

The pandemic has increased the need to be more dynamic, agile and granular in order to grow profitably while managing risk. Acceleration in digital adoption requires investment in improving customer experience, both in servicing and buying processes. This investment in getting future-ready needs to be funded through higher operational efficiency and productivity.

Identifying growth opportunities, exercising prudence in spending and operating within a robust risk management framework to deliver sustainable performance in a volatile environment remain a mainstay. Also, effective communication, both to internal and external stakeholders, has gained paramount importance.

As liquidity gained precedence during the pandemic, how were the strategies around spend management and cost-cutting impacted?

During the early stages of the pandemic, cost prudence was one of our top priorities. In FY21, we started the year on a conservative note on elements such as discretionary expenses, new hiring and staff increments. Alongside this, we continued to invest in creating digital assets for customer service and to generate new business. With growth coming back in Q2, our approach started normalising. We also invested in training and up-skilling our workforce and ensuring their well-being.

Going forward, we are hopeful that further impact on health and businesses would be limited due to increasing vaccination.

The pandemic afforded an amicable environment for savings, how does that inform your operations?

The current pandemic has led to higher awareness around the need for life insurance as a means for securing oneself and the family.

India has traditionally been a savings led economy and we expect this trend to sustain in the foreseeable future. We have a wide range of products catering to different customer needs and life stages. As an insurer, our endeavour is to be where the customer is and to promote goal-based selling.

In the context of the Q1 results, where claims soared as a result of the second wave, what are some of the top priorities across the next three quarters?

While the second wave appears to be waning, we remain watchful and are cautiously optimistic for the rest of the year. Our balance sheet has been resilient in these difficult times and we believe we have created adequate reserves to address excess mortality. We are facilitating vaccination coverage for our employees and will continue our investment in technology and human capital. For the rest of the year, we aspire to continue the growth momentum, enhance our value of the new business while improving the quality of business.

When it comes to future investments, be it short term or mid-term, what are the investment areas that you and your organization will go for without hesitation?


Our early investment in technology enabled us to smoothly transition traditional business touch-points to digital modes during the pandemic, minimizing business impact, ensuring the safety of lives and helped us stay ahead of the curve

We shall continue to invest in strengthening our distribution and enhancing our technological capabilities while calibrating overall costs. Our focus will be to simplify our sales and service journey, ensure seamless integration with partners and be future-ready. In addition, we will continue to invest in the capability development and well-being of our workforce.

How do you infuse dynamism in forecasting quarterly and annual outlooks in a changing world?

Our approach to planning is a mix of top-down – driven by our long-term strategy and bottom-up – based on business segments and distribution channels. It is both, absolute – tracking our past performance and relative – taking into account the competitive landscape.  We use multiple models to gauge the impact of evolving customer behaviour and changes in the external environment. These models are deployed to assess propensity to buy new policies, pay premiums on existing policies and detect claims trends and fraud.

Further, we have also embarked on our Integrated Reporting journey to provide a holistic view of HDFC Life’s financial and non-financial performance. This report covers information on our strategy, operating model, performance, governance framework,

external environment and our engagement with key stakeholders.

The disruption that necessitated remote working has also highlighted the need to build a strong digital infrastructure. This is also observed in the field of insurtech. How is HDFC life using/plans to use digitization and technology to become a competitive differentiator?

We do believe that digital innovation is not a choice anymore. Technology and data will be key for driving new business, customer service, claim payouts and risk management. We continue to invest heavily in our digital infrastructure and think it is a must to meet customer expectations of a simple buying journey, prompt service and uniform experience across platforms.

We have translated the customer voice into five major building blocks – journey simplification, partner integration, service simplification, data-led ecosystem and platforms. Four engines i.e. collaboration with startups, scalable architecture, hybrid work model and resilient cybersecurity, power these blocks and are the cornerstone of our digital model.

Learning from the pandemic, what is the new list of skills for the ideal CFO according to you?

As the world around us continues to evolve, it is important to embrace change. We need to keep reinventing ourselves to remain relevant. The pandemic has taught us to be agile and dynamic while having a prudent risk management approach.

We need to see the big picture and connect the dots while also rolling up our sleeves with attention to detail. It is important to have a long-term strategic vision along with the agility to adapt and thrive while responding to immediate opportunities and threats.