Insurance penetration in India has been a major challenge for ages. Along with factors like traditional insurance models and lack of infrastructure supporting insurance services; lack of consumer awareness has been a key contributing factor to the under-penetration of insurance in the country.
Insurance and awareness about insurance is majorly concentrated in the top 50-60 cities. As we move to the semi urban, rural and smaller cities, both insurance awareness and penetration keep getting scarce.
Even consumers who are aware of insurance, need help in understanding the specific product benefits as well as what the adequate insurance requirement is for them and their family. Consumers lack knowledge on buying the right insurance products and the adequate premiums required for their insurance protection. Hence, there needs to be a combined effort by the industry, regulator and government to ensure that a holistic consumer awareness is built around the importance of insurance and protecting consumers with the accurate insurance products.
Covid pandemic has played a significant role in increasing insurance awareness amongst consumers and has created a sense of urgency and need to buy insurance. Like every other industry, the insurance industry too used the digital route extensively to help consumers buy life and health insurance, which was the need of the hour. This period has been a testimony to the fact how digital can create a vital roadway in connecting consumers and increasing insurance penetration.
Insurance manufacturers, distributors, aggregators now need to accelerate the digital route as digital will form the roadmap for insurance industry in the next few years. Digital is catalyzing the entire experience of increasing consumer awareness.
Insurance is interactive-
With the advancement in technology, the entire concept of insurance has become interactive. The digital eco-system offers a greater capability to personalize consumer experience, which helps consumers receive insurance products tailored to their individual needs. Many insurance companies also use video tools, where the insurance advisors interact with consumers to explain the products nuances to them. From helping consumers raise queries about insurance products, to providing a host of options and helping them understand insurance products in more detail; digital insurance has come a long way in bringing a paradigm shift to the way insurance is brought, sold and serviced in the country.
Easy access to information- With 54 percent of smart phone penetration in India and availability of low-cost internet, people in the smallest of cities have access to internet today. Insurance companies are using digital initiatives extensively to educate consumers about insurance products and helping them reach out to the companies for right products in one click of a button.
Company websites provide detailed information about insurance and the product offerings so that consumers are up to date. Information provided by companies on their website brings transparency and prevents mis-selling thereby leading to benefits for the consumers in choosing the right plan. There is extensive use of social media, innovative online campaigns, websites, whatsApp, chat bots, google/ native ads, consumer awareness videos, texts, and email marketing to build awareness amongst consumers in every city and town.
Improvement in agent customer relationship- Digital insurance has played a significant role in improving the relationship between advisors and customers. Insurance advisors can reach out to consumers in the remotest of the towns in the country, instantly. Digitally enabled apps/ technology-based models can recreate what a fully operational branch can do. This has extensively helped insurance advisors in reducing the turnaround time for the end-to-end insurance process, leading to better consumer outreach. Hyper localization of insurance offerings and enhanced digital customer experiences present opportunities for insurers to improve customer engagement and drive better revenues.
While digital will bring in the next wave of growth in insurance, insurers will need to structure their approach carefully to capitalize on the opportunities offered by digital platforms. Given the dynamism which digital platforms offer, insurance companies need to make the optimum use of technology to increase insurance penetration in the smallest of towns. With the constant evolution of digital platforms, insurance companies can experiment with advanced models to help consumers get the best products and service. The best way to solve the problem of insurance under-penetration is to harness the power of digital.
The author, Devesh Rai is Consulting Chief Product Officer at RenewBuy. The views expressed are personal
First Published: IST