2020 entered in history as one of the most disruptive years. The pandemic highlighted the importance of protection to many customers, which led to increased demand for insurance and policy servicing. The social distancing brought fierce competition into the digital space.
Insurers are under pressure like never before to accelerate the digitization of end-to-end customer journeys and internal processes while adopting tools that they might once have considered risky just to stay ahead.
At the same time, industry-wide digitization is also opening the sector to a host of new private players. According to a study done by Oracle, there are six distinct trends that will impact Indian insurers in the near to medium term. These trends include disruption to traditional sales channels, adverse economic headwinds, the emergence of large ecosystems, regulatory tightening, stiff digital competition, and the rise of insurtechs.
The breakdown of traditional sales channels such as bancassurance and agency will lead to an even greater emphasis on digital sales. Innovative insurtech businesses, along with price-comparison websites such as PolicyBazaar, are putting pressure on incumbents to adjust their business models, rethink their strategy, and accelerate the implementation of emerging technologies.
Powerful forces are reshaping the Indian insurance industry. Economic headwinds have forced changes in business models and created shifts in consumption patterns that have yet to settle. At the same time, Indian insurers have themselves been impacted by operational disruptions such as travel restrictions, social distancing, and mandatory remote working requirements.
To survive and then thrive, Indian insurers will have to be adaptive. The insurers need strategies ranging from taking full advantage of data, enabling a more technology-driven workforce. With HCM Cloud, Generali saw a 70% reduction of time needed to complete a HR transaction and a 30% increase in productivity for product development and testing.
The insurers will need to use advanced analytics based on Artificial Intelligence (AI) and machine Learning (ML) throughout the insurance value chain, harnessing the power and agility of the cloud, modernizing financial management, streamlining regulatory compliance, elevating digital customer engagement, and enabling an ecosystem approach to bring the best insurance solutions to market.
India First Life Insurance enhanced its customer experience with the cloud In this new reality, the role of data will be even more pronounced than ever before. The insurers need to see data in new ways, discover insights, and unlock endless possibilities.
There is an upside for the protection business. In the midst of uncertainty and sweeping changes, digital transformation is finally underway. To cope with disruption in the traditional customer journeys, foresighted insurers have deepened their digital presence, embarked on better digital customer experiences, and are optimizing their digital sales channels.
Interest in financial and family protection has also surged. More people are now purchasing health insurance policies, particularly new insurance products that were introduced in the wake of the pandemic. According to regulatory data, health insurance premiums grew by 10.44% between July 2019 and July 2020[2]. Policy claims for COVID-19 treatment have also surged to over Rs 3,300 crore (US$450 million) as of September 2020.
Digital technology offers a vital means for shortening the application-to-closing process, lowering onboarding costs, and minimizing consumer attrition rates. Technology offers opportunities for the industry to settle claims more quickly, dramatically improving the customer experience, which in turn strengthens the brand loyalty – something that is the most coveted in this time of growing uncertainty.
The transitory period presents an opportunity for modern insurers to expedite their digital transformation plans. The insurers that survive this period will be those that make a valiant effort to be adaptive.. They’ll listen and respond to their customers in ways that are human, humble and helpful.
Source: Business World
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