Retelling the Insurance story in the disruptive era

Insurance being an age-old concept has remained traditional in its approach worldwide, particularly in India. However, this approach has clearly not helped its penetration amongst the masses. India’s current robust GDP growth, increasing per capita income and the absence of social security reflects that going forward people would require more and more protection of their needs. Towards this end, in the last couple of years, the insurance industry has adopted disruptive mechanisms to emerge as one of the most important platforms for people to access capital markets, investments, savings as well as protection.

Digitisation: Disrupting customer experience

You decide, you buy and you get it – in an instant. Digitisation has played the pivotal role in bettering customer experience and is also making a noticeable impact in insurance. Embracing technological disruptions has brought about difference right at the customer acquisition stage. It has helped companies to reach customers much faster than before while reducing points of failure and eliminating paper work by auto-populating information from Aadhaar and Pan while removing series of physical touch points. Be it customer awareness or query resolution through Chatbots; underwriting looking at cibil and social profile scores to settling claims online – the digital platform today is influencing purchase decisions, increasing transparency, reducing mis-selling and promoting ease of doing business making the entire insurance experience instant and hassle-free. Numbers are already witnessing a big shift as the online business for insurance industry has been growing at a CAGR of 27% in the last four years.

Transparency at every touch point

Life insurance is not only an investment, here one buys for his second and third generation and involves a lot of trust. A wrong underwriting or a wrong policy can really cause a lot of trouble. The regulator has taken cognizance of this and over the years has pushed for regulations imbibing transparency both in terms of cost and benefit. This trend is going to further evolve where the customer will have more choice. Be it insurance, mutual fund or fixed deposits, every industry will be able to offer products with overlapping benefits giving the customer the choice to buy from any manufacturer. This will focus on giving the entire customer life-cycle a new shape and cost-competitiveness by diluting barriers between various products and its manufacturers.

Open Architecture empowering customers

This regulatory intervention is yet again a positive disruption offering customers the choice to buy plans at competitive prices while reducing chances of mis-selling. It has emerged as a welcome move and a win-win situation for both banks and insurance companies, which will further lead to increase in insurance penetration at lower distribution costs.

What holds the future?

Selling to counselling approach

There will be a clear shift from selling to counselling of insurance products. Segmentation will move towards understanding customer mindset and products will be created to suit their needs.

Building co-created financial solutions along with the customer

One size fits all will slowly move to more mass customization, co-creation of solutions along with the customer, which is clearly a trend in the west. From product design to claim settlement, every process will be driven by the experience the customer wants. Customers will buy policies which are useful to them, simple to understand, affordable and easily available.

It is therefore evident why insurance companies today are keeping disruption at the core of their business strategy enabling innovative solutions, reducing costs while capturing greater value for the customers, employees and other stakeholders. From decision making to purchasing and finally at the time of claims, positive disruptions across touch points will call the shots for a futuristic insurance experience.

Pankaj Razdan
MD & CEO, BSLI & Dy. CE - ABFSG