I changed as a consumer and how it’s impacted the insurance industry
If you are insured, be rest assured…
Till about two years ago, investing in additional health insurance besides the office medical cover, never occurred to me. The pandemic, however, made a very good case for it. It was over a couple of drinks with old colleagues a few months ago that I was eventually convinced into buying one online.
Is my money safe? Is my financial data, my documents safe? A thousand concerns bogged me. With some help and assurance from my friends in the insurance sector, I did my research, finalized a policy, and eventually ventured to buy one virtually.
Before this, I had never bought a personal health cover, let alone buying one online. The pandemic has changed me as a consumer. How is my behaviour as a consumer changing the insurance industry? In more ways than one, I reckon.
The insurance sector is becoming more tech-savvy
The pandemic left businesses worldwide gasping for breath, and the insurance sector was no different. But the industry weathered the crisis well with the help of initial investments made in back-end digital infrastructure. While online aggregators are digital natives, distribution of insurance in legacy companies was typically through on-field agent networks. With the wants of the pandemic, the distribution channel has now gone digital and is more transparent and quicker. We can now just login to the Internet and complete the entire process of discovering information, seeking advice, purchasing, and renewing a policy on any device. The convenience digital channel offers will of course transcend the factors driving its growth in the current scenario, such as contact-less services.
While changing demographics, customer expectations, and competitive pressure had already started the digital drive in the insurance industry, the pandemic has further vetted its appetite for automation and digitization. From selling new policies to settling claims, the extended lockdown in the wake of COVID-19 has pushed insurance companies to depend heavily on virtual means. This has opened new opportunities for companies to innovate in servicing, selling, and building customer relationships. AI-powered underwriting solutions, for example, are saving 97% of the time and resources traditionally required for the process.
The industry is now also more customer-savvy
While legacy companies focus on upping their digital game, specialist insurers such as ACKO General Insurance, or Go Digit General Insurance, are bending the game. These new-age insurers have built a network of partners across e-commerce, travel, auto manufacturers, and so on, to pitch bite-sized or customized policies to customers directly in the check-out cart. Customer experience and customer needs are at the center of these new-age organizations, boosting customization and hyper-personalization in insurance products.
To achieve such customization, deriving insights driven by Big Data is vital. Data and its effective analysis will allow insurers to have a deeper understanding of user behaviour and make tailored policies as per customer expectations and requirements. Gradually moving away from off-the-shelf insurance products, insurers are quickly adapting and introducing specific covers for pandemics, cyber threats, home, usage-based, sachet insurance, among others. Take for example Allianz Suisse’s Splitsurance, which is focused on university students in Switzerland who ‘flatshare’; or CUVVA, which offers hour-based car insurance. Customer behaviour, preferences, patterns play a key role in the design and development stages of such products.
Continuous innovation in designing policies, sales strategies, operations, and customer experience will no doubt be the biggest differentiator for insurers going forward. How the industry responds to future fluctuations in the digital landscape, economy, and consumer preferences, will be critical in deciding if the change-for-good is sustained. The future, nevertheless, is digital, and that’s insured.