How Navi Killed Competition ? Why Navi Is Dominating Insurance Business ? Business Case Study - YouTube

Earlier we did not shop online for fear that the goods would come or not

may our money not be wasted.

But then a company came along that changed everything for us

That company was FLIPKART.

When Sachin and Binny Bansal started Flipkart,

the only thing in their mind was

BEHAVIOURAL SHIFT

Flipkart may not be profitable,but with the advent of Flipkart,the way people shop has definitely changed.

And those companies who can change people's behaviour,

whether that company is today profitable or not, but they will be profitable in future.

But why is this so?

And the reason is GAS

(General adaptation syndrome)

In simple words, when our body goes through any experience whether it is positive or negative,

our body adapts it and when you experience it again, your body reacts in a certain way.

Not only this,with time your body's capacity to handle that thing increases.

And thats why, it becomes tough to leave when you are addicted to something.

Specially when that habit is of taking convenient decision

But when company creats behavioural shift in society,

it benefits crores of people.

After the exit from Flipkart, Sanchin bansal formed a company named BACQ acquisitions private limited

which he later converted into BFSI company,whose name is NAVI.

NAVI's business mainly comes from these three companies

NAVI PERSONAL & HOME LOAN

NAVI HEALTH INSURANCE

NAVI MUTUAL FUNDS.

Which company's revenue was 200 crores in 2020,it has reached 800 crores in 2021.

But the question is,during the pandemic when there was lockdown in whole country and all the businesses were shutting down,

What did NAVI do that it is a profitable as well as valuable company today.

And what are those business lessons we should learn and implement in our business ?

If you look at NAVI's breakdown revenue,you will see that their major revenue comes from their personal and home loan segment.

But NAVI's flagship company is Navi Health Insurance

But the question is,what is the flagship like in Navi Health Insurance right now?

Scenario of India is such that in India banking is tough,financial services is tougher and insurance is the toughest.

So the question is then why is it like this?

And the reason is complexities in simple things make big money.

Now understand this very carefully. Now tell me which is the fancy word among this two

1. PROFITABLE

2. LUCRATIVE

Second word looks more fancy doesn't it.

And of course,if someone uses a word like luceative in front of you,watching its complexity,you will automatically think it more knowledgeable.

But in reality meaning of both word is same.

In the same way in India,when people go for their health insurance,the advisors don't even tell them half things and other half in a complex way that people won't understand

And they force them to take most expensive policy.

but the problem comes when people go to claim their insurance

more than half of the people don't even have an insurance claim

Think you are admitted in hospital and you insurance cover of 10 lakh Rs and your bill is of 8 lakh Rs

but your claim didn't pass.

Now how will you pay this 8 lakh Rs?

In our country this problem became so critical that people also sell their house and jewellery to pay bills.

while they have insurance cover.

and to change that Navi Health Insurance came.

This company serves more than 12 lakh customers within 3 years

Which the rest of the company takes years to do

How did navi did so fast?

So the answer is hidden inside this thing -

CUSTOMER PAIN POINT.

How does insurance business work? If we understand in simple language

A lot of people contribute small amount and if among those one is in problem sometime then the amount can be used.

Mainly insurance companies earn from two ways

1. POLICY SELLING

Sell so many policies that a lot amount is collected

2. CLAIM REJECTION

Reject their claims so that you don't need to give them money.

Most companies select the second option because its easy.

And here NAVI made its first business strategy.

NAVI studied its consumer behaviour and they got to know that

only because of two reasons people don't buy insurance in India

1. PROPER EDUCATION

Most people in India are not aware about advantages of insurance, they don't know, why health insurance is the must.

2. BAD EXPERIENCE EXPOSURE

They had their own bad experience or heard about others.

The advisors don't even tell them half things and other half in a complex way that people won't understand.

And the day comes they need to claim but they are been rejected.

And they lost their Trust.

When people come out of hospital with this kind of experience

They will never take any policy from that policy seller.

When this happens,the money coming to the company decreases and company start rejecting more claims to servive,

and this loop goes on and on.

Navi focused on claim settlement either than selling policies.

Claim settlement ratio of NAVI is 97%,means it is very less likely to reject the claims.

As NAVI started giving claim settlement service,people started talking about NAVI

People got their health insurance done but also told family and friends to do,you will face less problems.

NAVI's customer base started growing faster

they got so much money that they don't need to reject claims unethically.

I know,now a question must be coming in your mind

there are many big companies in market and giving 97% Claim settlement ratio would not be a big deal to them

Then why only NAVI became this much successful?

The reason is JOURNEY OPTIMISATION

The whole journey from buying insurance to claiming it was so painful before NAVI came.

Buy health insurance out of fear at first and get scared when the claim is rejected

but NAVI twisted the game

NAVI did this three thing to make painful journey convenient

1. EASE OF BUYING

Earlier,if one wanted to get health insurance,one had to work very hard.

but NAVI did this thing digital.

Now anyone can book his health insurance within 5 to 10 minutes.

2. SPEEDY SETTLEMENT

Now policy is been sold but customer would be happy when his claim would pass

If any of you have used NAVI health insurance ,then you must be knowing that they settle your claim within 20 minutes

But the third thing they did,after there will be hardly any customer who will not leave him even after using it.

3. UNLIMITED RESTORATION

Sounds too complicated but chill I'll explain in easy language

Suppose you took insurance policy of Rs10 lakh and something happened to you and you are admitted in hospital which bills Rs8 lakh

but most of what happens in insurance is that if your bill is of Rs8 lakh and the claim is passed

then 8 lakhs would be deducted from your policy and now when you will admit next time you would have 2 lakhs claim

When you will admit next time and bill 3 lakh,then you need to give 1 lakh from your pocket.

but this does not happen in unlimited restoration

If he had taken same policy from NAVI,then something like this would happen

As he was admitted,he claimed for 8 lakhs and after the claim was passed the policy amount will be restored.

now if again he is admitted then he would get cap of 10 lakh,means he can claim more 10 lakh

But you have some condition in which you would not get unlimited restoration

like above 40 years of age,anyone recurring illness,etc

But NAVI provided unlimited restoration facilities in most of the cases.

Unlimited restoration and network of 10000 hospital,NAVI gives two more facilities

to customer which other companies can't even think.

1. 100% coverage + no rent cap

Most policies only cover surgery expenses but other medicinal expenses can't be cover under that policy.

In some policy you can only rent a room.You don't have any freedom to choose your room.

but NAVI did gave the freedom and medicinal expenses which is available in very few policies.

2. Pre post hospitalization

Suppose you have to have surgery but most of the time this happens

you need some medicine before the surgery and after it

but the medicinal expenses before and after surgery are not been covered in policy

From this NAVI started providing pre and post hospitalization.

Medicinal expenses 60 days before and 90 days after surgery are covered in policy.

NAVI created its value proposition like no one can forget them.

Now hardly and person can shift to another service after using NAVI.

Now most importantly,

what are those lessons we should learn from this case study and implement in our business?

Their are some pain point of customer in every industry

And the company whose motive is to make profit ignore these points

And a company comes which solves all the pain points and brings these big companies down

which NAVI did

2. Understand the loops

business is formed by creating a loop of BUYING,SELLING and RETENTION between them and customers

The special thing about this loop is

if there is a mess inside this loop then customer will leave you

there is definitely a way to beat big competitors in business

Like Rapido pulled out to beat Ola and Uber.

Rapido would have gone bankrupt but today it is at the forefront of the bike ride segment...