The COVID epidemic is increasing the adoption of online platforms in India, providing insurance firms with a critical new channel for engaging and serving clients. This year’s customer surveys and sales statistics reveal that the epidemic has quickly boosted public knowledge about both medical threats and insurance products in India. As a result, insurance platforms are swiftly transferring to digital sites.
The Covid-19 pandemic has been a significant driver of the digital insurance trend. The sudden shift to remote work and social distancing measures has accelerated the adoption of digital insurance solutions. With many people staying at home and avoiding face-to-face interactions, insurance companies have been forced to find new ways to reach and serve their customers. This has led to the increased use of digital channels for purchasing insurance, managing policies, and submitting claims. Additionally, the pandemic has also highlighted the importance of having access to insurance and financial protection, which has contributed to the growth of digital insurance solutions.
Today, consumers may obtain insurance coverage online using digital platforms, which offer a similar approach. These platforms are forming diverse ecosystems throughout sectors, from e-commerce and payments to healthcare and mobility. According to the Swiss Re Reports, Google Pay and PayTM are leading the charts of most preferable platforms for insurance products online followed by Amazon, Flipkart, and PhonePay. This proves the fact that life and medical insurance products are gathering momentum on online platforms, which is promising.
Additional read: Group Health Insurance Policy
Now, let’s dive into a few drivers for the Digital Insurance Trend in India:
Raised Public Awareness and Accelerated Online Customer Service
The introduction of coronavirus has quickly boosted public consciousness in the nation regarding both medical risk and insurance products. A previous Swiss Re poll of Asian marketplaces in May 2020 echoed this view, with two-thirds of participants expressing concern about their healthcare and indicating that their insurance buying behavior will switch to digital channels. This is corroborated by Policybazaar’s sales data, India’s largest online broker. They claimed a twofold increase in medical insurance sales from March to May 2020.
Another poll conducted by ‘Max Bupa Health Insurance’ discovered that millennials have also increased to inquire about medical insurance after the epidemic spread.
Indian insurance companies reacted rapidly to the epidemic by establishing coronavirus-specific products. Some items were released before the countrywide shutdown in March. Policies have largely been sold digitally, with mostly payment and e-commerce applications being used for delivery. Companies have also released a COVID-19 benefit-based plan designed by the regulator. Some conventional firm sales forces have also been provided online tools to help them operate through the nationwide lockdown, ensuing social separation.
Before the pandemic, insurance firms in India were beginning to migrate to online customer interaction. But COVID-19 has expedited the speed of transition, and firms have brought innovative solutions and products to the marketplace. Optimizing customer support processes by expanding the usage of video conversations, AI-supported conferences, and seamless claims processing are among them. Some companies have gone paperless with their customer acquisition and streamlined their claim procedures. The adoption of online conversational platforms has increased by 50% at companies using multichannel techniques.
Role of Millennials in the Digital Insurance
Millennials are the primary driver behind the nation’s online development and the major customer sector for digitally disseminated services and products. They account for approximately 34% of the population in India and around 47% of the employment. Millennials are more informed and more technologically engaged than previous age groups, accounting for nearly half of all online consumers. They act as a catalyst for market and business model change.
Smartphone usage and data consumption are increasing in India, owing to the availability of low-cost, high-quality smartphones offered both offline and online, as well as improved, more inexpensive internet access. The government has prioritized increased internet accessibility, launching the “National Broadband Mission”. The goal of this mission is to achieve “broadband for all” before 2022. This mission will invest 100 billion USD over the upcoming 3-4 years, with 35 billion USD going toward telecommunication tower construction, 35 billion USD going toward fiber-optic cable installation, and 30 billion USD going into, R&D, spectrum, as well as other operations. It should have a multiplier impact on the economy: a 10% growth in mobile web traffic can boost India’s GDP by approximately 1.6%.
Digital Financial Services
India has built the necessary digital infrastructure to enable identity authentication without the customer’s physical contact. It is called India Stack, and it solves the most significant barrier to financial participation in semi-urban and rural parts of India: the absence of a distinct multi-purpose identity system. Aadhaar, the digital identification initiative, is a result of India Stack. It provides frictionless, paperless, and cashless provision of finance and insurance products when integrated with existing India Stack technologies like Digital Locker, e-KYC, e-Sign, and UPI. The government is eager to develop digital payments and aims to raise per capita online transactions tenfold by the end of 2022.
This would open up several potentials for cross-linking and up-selling items, including insurance products. Fintech is an established start-up market in India, accounting for 10% of overall IT start-ups. The start-ups in Fintech were the pioneer to incorporate India Stack features into their apps and acquaint customers with online payment channels, broadening the possibility for supplying financial solutions to a diverse demographic group.
Fintech remained to be the most-invested-in industry in the early half of 2020, having 1.47 billion USD in investments, increasing 60% each year. The most prevalent use instances include:
- Digital transactions
- Insurance analysis, and
- Alternative financing along with
- Investing networks,
- Credit score maintenance and
- online banks projected to be the upcoming factors.
Platform Partnerships
In India, online platforms span from ride-hailing, culture, and payments such as Urban Company, Ola, PayTM to online commerce such as Amazon, Flipkart, and beyond. They have a diverse set of customer connections and data that insurers may use to facilitate quicker client onboarding and broaden the bounds of insurability. These cross-industry efficiencies can bring insurance companies closer to their customers and allow them to regulate client risk more proactively. Online insurance start-ups use technology to overcome conventional constraints such as complicated products, few consumer engagements, and inadequate customer support.
Benefits of Digital Insurance
Adopting online insurance solutions is the smartest way ahead, and companies and consumers will immediately see benefits such as:
Cost Reduction
To a large level, technology has closed the barrier between the insurance business and the insured. With the introduction of online marketing, the conventional way of marketing, which involved large operational expenditures, has significantly gone down.
Increased Safety and Transparency
Unlike traditional insurance plans, there is no chance of damage or loss to coverage. The online version of the insurance plan is secure and may be viewed by the customer at any time from any location. Furthermore, online insurance provides a safeguard against errors and theft by agents or dealers.
Transactional Convenience
Customers today expect immediate and immediate responses to their requirements. Digital transactions make it easier to participate in different insurance-related operations. Furthermore, users may do digital transactions from the comfort of their own homes and at any moment. Furthermore, by modernizing the purchasing, renewing, and claim processes, the whole method is streamlined, enhancing the consumer’s total experience.
Brand Recognition
Online marketing aims to educate consumers about the insurance firm’s offerings. Companies may raise brand recognition among target consumers by using social media accounts, apps, text, and email promotion.
After-Sales Service
Though the first reaction during the purchasing phase of an insurance plan may provide clients with the desired satisfaction; there is a widespread perception that consumers are ignored once a plan is issued. However, with online insurance, post-sales servicing, such as the procedure of filing a claim, is simplified and paperless. In addition, insurance firms are leveraging their social media accounts to get comments and issues in order to remedy problems. As a result, they can give superior post-sales support much quicker than typical insurance businesses.
Conclusion
Online technology is now an integral part of the industry which has generated fast changes in the insurance industry. This, in turn, has generated the solutions that will continue to affect the way in which consumers interact with their insurance providers. The increasing number of insurance companies in the online space is not only challenging the traditional business model; but also altering the way customers interact with insurers. The rise of digital channels allows insurance firms to communicate with customers anytime and anywhere.
The future of the insurance industry is online technology, as it offers clients significant growth opportunities, and online sales and service facilitate customers’ current and previous expectations. Clients today expect a lot more than merely paying their insurance premiums and receiving annual or occasional insurance policy coverage, and many want to use sophisticated online services to accomplish their goals.
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