What a difference a year can make? 2020 may be the answer. The ongoing COVID-19 pandemic drastically shifted consumer needs, habits and expectations, while compelling virtualization of operations literally overnight. The tiny yet deadly novel coronavirus triggered a galore of structural changes across all sectors and the insurance industry was no exception. The year saw many important planning go awry with working from home and dealing with clients virtually becoming the new normal for an industry that traditionally relies on face-to-face communication. Fortunately, during these tough times, the Indian insurance industry buckled down efficiently. The industry made the best use of technology to provide the greatest possible support to customers in buying the right protection products.
This year, the Indian insurance industry is mostly expected to search for growth through new service-based models, innovative products and better focus on prevention.
In the months gone by, insurers have started to realise the fact that the traditional approach of selling insurance products to the customers will no longer be near enough for the insurers who wish to stay ahead of their competitors. The foundation of the entire insurance industry is based on offering products and services to the customers that help them stay protected against loss as a result of an unfortunate event. And, in the new year, while this will continue to remain an important element of what insurers do, we will also witness a technology-driven shift in the way insurance is sold.
The insurers will focus more on selling insurance products through tele-medical process which is need of the hour. This will be complemented by e-KYC process for completing the verification process of the customers to buy a health and tern insurance plan. During the ongoing COVID-19 pandemic, the digital shift towards selling insurance policies has gained significant traction is sure to continue in the years to come. Buying insurance through digital channels ease the buying process and gives customers a plethora of options to select the right insurance product as per their choice and requirement.
New Insurance Products
The awareness around need for protection has increased by many folds since the onset of the pandemic. The need for insurance has become ubiquitous with maximum people investing in insurance products as per their requirements. Interestingly, demand for insurance products for a plethora of risks that were usually not covered by insurance companies has started gaining traction. These covers range from protection against a pandemic to protection against seasonal illnesses like dengue. Though they would prefer to pay a decently priced premium for these policies. For instance, the Corona Rakshak plan, that is available for a time period of 3.5 months to 9.5 months and is available for a premium as low as Rs. 100/month. With the availability of such products digitally as well, these will rightly cater to the digitally-savvy generation of people.
Rise in Demand for Standardised Products
The year 2021 will be the year of Standard Insurance Products. In the year 2020, all general and specialised health insurers on the directions of the IRDAI came up with standard health insurance product – Arogya Sanjeevani. Later, the regulatory guided all life insurers to come up with a standard term life insurance plan – Saral Jeevan Bima from January 1st 2021. Later, the regulator asked insurers to come up with a standard Personal Accident Cover and, now the regulatory body has asked insurers to launch a standard Travel Insurance from April 1st 2021. The introduction of standard insurance products across all major insurance sectors – Health, Life and Travel – IRDAI is leaving no stone unturned to increase the insurance penetration rate in the country. The regulator aims at bringing maximum people under the insurance umbrella and provide them with maximum financial help.
All these standard products are expected to gain pace in the year 2021 with many more people enrolling themselves under these products. In the last 10 months, people have well realised the importance of insurance and the need to stay protected. A majority of people in India are not covered under any insurance product and these standard products will give first-time buyers a boost and confidence. The standard features and wordings of these products will make them the first choice of buyers who cannot afford a comprehensive insurance policy. Moreover, many more standard insurance products are expected to come up in the new year.
Another category of insurance products that will be in high demand in the year 2021 is Switch-on and Switch-off insurance. Today’s consumer looks for products that offer their adequate coverage only when they need it. An excellent example of one such product is Usage-based car insurance. This new type of car insurance policies – launched under the sand-box category of IRDAI – allows car owners to insure their vehicles for kilometres they tend to drive instead of the run of the mill full year. For all those looking for a car insurance policy that’s priced based on how much you actually drive, pay-as-you-use insurance may be the answer. For drivers who aren’t constantly on the road, these plans could offer an opportunity to reduce car insurance costs. Moreover, the option to have multiple vehicles covered under one policy makes this policy more value accretive.
Wellness Products and IoT
Over the years, the structure and features of health policies have evolved significantly in order to cater to the specific needs and requirements of the customers. Customers have started practicing a healthy lifestyle backed by efficient and effective wellness and preventive healthcare measures. The coming year will see insurers come up with plans that focus on making customers fit and health. Even the insurance regulator has issued guidelines to insurers on wellness and preventive features. The insurers are expected to come up with a plethora of exciting benefits to offer to the policyholders. Some of such benefits include discounted OPD consultations or treatments, Pharmaceuticals, Health check-ups/diagnostics, redeemable vouchers to obtain health supplements, memberships in yoga centres, sports clubs and many more.
Yet another prominent technology that will play an important role in shaping the online insurance industry in the coming years is Internet-of-Things (IoT). The technique will help the insurers – especially the auto insurance industry – to cut their overall costs while enabling the customers to automatically initiate the damage repair and claim process. At the same time, a significant focus of the insurers on customer interaction and experience will brought about the need for Voice Analytics – an efficient voice recognition tool to analyse and record a spoken conversation.
(By Vaidyanathan Ramani, Head-Product & Investments, Policybazaar.com)