Rahul Agarwal, Ideal Insurance - On being India’s youngest CFA and being an entrepreneur

Rahul Agarwal was looking for a job when a sales manager at Max New York Life made him an insurance agent. He was unbelievably effective and the company discovered a prodigy in insurance sales. But instead of simply basking in the glory, Rahul decided to strike his own path and started Ideal Insurance, which is one of India’s leading insurance broking companies today. In this exclusive chat with YourStory, Rahul speaks about his entrepreneurial journey and managing insurance for assets worth Rs. 1 lakh crore, within five years.If someone asked you to tell them about Ideal Insurance Brokers in about three sentences, what would you say?

Ideal Insurance is a risk management organization providing risk management services to both corporate organizations and individuals. It is one of the fastest growing insurance broking companies in India. Our strengths lie in our highly motivated and energized team and our strong focus on claims management.

How is Ideal different from other insurance brokerage firms?

Ideal is led by a very young yet technically sound team. Considering the changes that the insurance industry has seen in the last decade, a fresh outlook to the business is indispensable

The insurance industry seriously lacks good human resources, as insurance is still not a preferred career path for most people. We have built our team over a period of time, through continuous learning and training and also, by spotting talent at a “fresher” stage. Today, they are very committed to the organization and work like stakeholders and not employees

Since we are essentially selling the same product sold by 40 lakh competitors (agents), we have created product differentiation by focusing strongly on claims management and exploring relatively new areas of business like credit insurance. We also specialize in infrastructure insurance and group health Covers.

We believe in empowering people and giving them more responsibility and decision-making powers. Though it can sometimes hurt in the short term, it brings out many leaders in the long run.

How did the business idea for Ideal come about?

During my college days, I was pretty focused on going to USA to get an MBA. Since good US universities ask for work experience, I started looking out for work after the second year of college. This was 2001, the year private life insurance companies started operations in India. A friend asked me to try my luck at Max New York Life (MNYL) Insurance. They didn’t give me a job. But a sales manager offered to make me an agent with them.

It happened by chance and I never thought that it would become my career. I did exceedingly well with them and became the youngest MDRT (Million Dollar Round Table) member at age of 20. That continues to be a record at MNYL till date. They even sent me to New York, to attend the Annual Sales conference of New York Life, 2002. There, I came to know about “insurance broking” which hadn’t reached India till then.

In 2003 I went and did my MBA in SP Jain and after getting out of college, I wanted to start something on my own. Since I loved selling insurance and insurance broking was a relatively new concept in India, I decided to start Ideal. I knew there was a lot of value addition to be done in this industry and I guess we have been quite successful with that.

Tell us about your background.

I hail from Kolkata and I belong to a comfortably rich family. My father is into share broking and real estate. He was completely against the idea of starting something on my own and that too, in a “dirty business” like insurance. He wanted me to take up a good job after my MBA. But I chose to defy him and pursued my dreams. Even today, he thinks that we would make more money if I joined him. But then, it’s not always about the money!

I did my graduation from the St.Xaviers college of Commerce, Kolkata. I am also the youngest CFA (Chartered Financial Analyst) in India. I became a CFA when I was 20 years old.

Let us know about the tie-ups that you have. Is there acceptance for your concept? Can you give us some incidents to illustrate the same?

As an IRDA-registered broker, we have tie-ups with all the insurance companies in India. However, becoming an insurance broker is not a walk in the park. There are only 300 brokers in India and this figure is a pittance when seen in the context of the number of agents in the country (40 lakh agents). I faced lot of challenges in getting the license and I was the youngest principal officer of an insurance broking company to get the license. This was at the age of 24.

Insurance broking is still in a nascent stage in our country. Awareness is increasing rapidly, though. People are still more price-conscious than service-conscious and they also chose to prefer taking insurance from relatives, rather than professionals.

Brokers have traditionally focused on the corporate business till now, because of the higher ticket size. We are soon launching a web portal to enter the retail insurance space and also, to capitalize on the growing health insurance market.

Where do you see insurance broking and Ideal five years from now?

Insurance broking is definitely on the rise. Considering that 80% of the business in developed markets like US and Europe is cornered by brokers and considering the obvious advantages clients have with us, it’s just a matter of time before people start preferring brokers over other intermediaries.

I am not a great planner and believe in taking things as they come. To be honest, I have not thought too much about Ideal after 5 years. But at the current pace, we should definitely be managing insurance for assets worth more than Rs 1 lakh crore. We aspire to have at least 25 branches across the country and a strong presence in South East Asian countries. We are extremely positive and enthusiastic about the online insurance market too.

What is Ideal's revenue model?

We get commissions from the insurance companies on placing business with them. We also earn by providing claims management services to clients.

As an entrepreneur, what are your joys? What are the challenges?

When you provide employment to more than 70 people and people praise your work and your company, you feel like you’re on the top of the world. There’s so much joy in doing what you like doing the most. For me, l love selling insurance and I love meeting people. Even today, I meet clients every day. We experience tremendous joy every time we hand over a claim cheque to our client. In fact, the entire process of following your dream is a joy ride.

Having said that, I’m sure that I can write a whole book about the challenges of starting up. I didn’t have the money. I didn’t have technical expertise. I didn’t have support from family or friends. People were not willing to work with a startup. You see your batch mates working with big companies, earning huge salaries and going on expensive holidays. And you start questioning your decision. No sensible father will consider giving his daughter’s hand in marriage to you. You will get humiliated by your own people and routinely get called “stupid” or “idiotic”. But the happiness at the end of this tough ride makes it all worth it.

How big is the Ideal Insurance Brokers team? Are you looking at hiring?

Currently, we have more than 50 people at Ideal. We have another 20 in our new mobile phone business division. Our team is very young, with the average age hovering around 30. Most of the team started as ‘freshers’ and have grown, along with the company. My co-director and COO, Rahul Mohata, is very strong in administration, relationship management and team management. Amit Agarwal, who holds an MBA from SP Jain is the driver of big key accounts. Goutam Dey, who used to be with ICICI Lombard, is our underwriter. And yes, we are looking at hiring more people.

Let us know about your expansion plans.

We have opened up branches in Pune and Delhi in January 2011. We’re planning to make an entry into South India through a merger with a Bangalore based company. We’re also starting web portal for health insurance. Plans are afoot to start a branch in Hong Kong in May. So, thre’s a lot on our plate for now.

Apart from this, we have got into mobile phone distribution with a Hong Kong-based company. We are starting with West Bengal and we plan to cover the whole of East India and Maharashtra by the end of this year. We also have a big real estate project coming up in Kolkata.

How has the journey been so far?

We have more than 500 corporate clients and 10,000 retail clients. The most popular products are health insurance and credit insurance and the most popular service is claims management. Health insurance is the fastest growing segment in Insurance and that will be our key growth driver in the future. Considering a population of 120 crores, the number of people who have more than 50 crores and a current buyer base of 4 crores, it’s terribly exciting. If our website project takes off. then the sky is the limit for us.

We at YourStory wish Rahul and the entire team at Ideal all the very best for all their endeavours. To know more, check outwww.idealinsurance.in. Also, do share with us your comments and thoughts about this story. You can write to us at[email protected].

Sriram Mohan | YourStory | 15^th March 2011 | Bangalore