Extended warranty market growing rapidly in India: Vivek Burman, The Warranty Group
High costs of repairs, benefits and better customer experience will drive growth of the warranties market, says Vivek Burman.
How big is the warranties market in India?
Extended warranties and allied services are being rapidly adopted in India, with the market being on the growth trajectory. As per the IBEF Report on the Automobile Industry, the Indian automotive aftermarket is estimated to grow at around 10-15 per cent per annum to reach $16.5 billion by 2021 from around $7 billion in 2016. It has the potential to generate up to $300 billion in annual revenues by 2026, create 65 million additional jobs.
Factors that positively influence the decision to purchase extended warranty in the after-sales market are recurring cost of repairs, benefits and coverage, and the overall customer experience.
How big is your operation in India? Who are some of your large customers?
The Warranty Group (TWG) entered India via a joint venture with TVS Automobile Solutions in February 2014. The company offers extended warranties and related services and solutions for passenger cars, commercial vehicles, and off-road farm equipment in India. In a short span of time, our company has achieved a market leadership position in the automotive warranty and allied services space in India.
TWG manages extended warranty and allied programs for some of the largest global names in the automotive sector in India.
What is the USP of TWG? What advantages/benefits do you bring to customers?
TWG manages the entire end-to-end client experience -- from customising products and solutions to handling the after-sales process. Also, this sector has traditionally been slower in using data for decision making, and that is a huge differentiator we bring to the table.
Data is the way forward globally, and in India, our company offers brand-adjusted customer experience based on business intelligence and data analytics. By aggregating the diverse data from clients and markets, we aspire to help them generate insights to realize greater data-driven responsiveness, thereby deepening the relationships with their customers.
In India which all verticals do you offer warranties in? What are your expansion plans?
In India, extended warranties and allied products are available for automobiles, appliances and technology products (Mobiles, Laptops, Tablets, etc.). With exciting opportunities in the extended warranties and after-sales services in India, we at TWG are looking to intensify and aggressively expand our presence in country.
In India we offer brand-adjusted customer experience based on business intelligence and data analytics. Our operating model focuses on industry leading companies seeking a partnership to innovate new products and services, improve existing products and services and navigate risk transfer and compliance issues. The partnerships are built on our expertise as a service provider and the customized solutions created by us to help them acquire new customers, improve customer loyalty, and grow their bottom lines.
Recently, Assurant Group acquired TWG. What are the complementary strengths for each in this deal and how will this impact the India operations?
The acquisition by Assurant of TWG will help in advancing the strategy and vision of TWG in India. By banking on each other’s strengths, both companies will be able to diversify growth profiles and expand the global footprint.
How have you been able to use data analytics to improve risk profiling and managing customer services?
Data is the way forward, and this is one of our unique selling points. TWG is strengthening its focus on business intelligence and data analytics further. By aggregating the diverse data from clients and markets, we work with them to derive better insights and build deeper engagement with their customers by helping them to generate insights to realize greater data-driven responsiveness, and deepen relationships with their customers (there are several examples in the APAC region – for a Japanese retailer, TWG helped them ascertain how many of its members make repeat purchase).
On the risk side, data analytics helps TWG to understand various underlying developments of claims — critical to TWG’s loss ratio calculations — from seasonality to potential consumer behavior.