Embedded Value: Insurers as financial security providers

The experience gained during the last two years has the potential to make insurers think very differently and challenge themselves to drastically change the view that the insurers hold about their own business.

The pandemic has ushered in a completely new definition of the business of insurance and quick leveraging of the digital environment.

The best time for insurers to transform themselves from being a seller of insurance to a provider of insurance has arrived. After the outbreak of Covid-19, people have recognised insurance as a basic necessity. It has also been largely recognised during the first and the second wave of the pandemic that the insurers are not far behind the health care workers when it comes to saving the lives of those who were infected and also of those who lost a family member to it.

The experience gained during the last two years has the potential to make insurers think very differently and challenge themselves to drastically change the view that the insurers hold about their own business.

Insurance is a basic necessity

The pandemic has ushered in a completely new definition of the business of insurance and quick leveraging of the digital environment. Insurers have redefined their products, re-profiled their customers and have opened up new channels to reach the potential customers and to serve them better.

Insurers are today debating on how to provide solutions to customers based on data available across the industry. For a 360-degree protection to a customer which may protect his complete life span, insurers have to collaborate with each other and provide the customer solutions that are essential and economical. The traditional view has been to look at the affordability of the prospect rather than at the various requirements of the individual and his family. But data analytics may throw up near-perfect solutions and this is possible today.

As we look at the public communications of various companies today we find a common theme: providing adequate protection at the minimum cost. Websites of certain companies today give the customers opportunities to choose the best protection for themselves. Today the big question is not how to create a need and fill it; but how to recognise the need and fill it.

Provide hassle-free service

Insuretech has helped provide hassle-free service to the existing customers and insurers are subscribing to the view that good service will lead to high customer retention and even acquisition. The biggest challenge for insurers all these years has been creating insurance awareness and now this challenge doesn’t exist.

It is a golden opportunity for the insurers to shed their old image and become a solution provider. Insurers must re-train their workforce, redesign their marketing strategies and discard the pre-pandemic work models to adopt digitalisation till the last mile so that they match the needs and aspirations of the potential customers who look for best solutions, no hassles and no hidden costs.

Insurers have to encash the lessons learnt from the pandemic regarding new ways of drawing the attention of the consumers and of connecting employees to deliver results and adopt innovative strategies to convert their companies into financial security providers from being mere sellers of insurance policies.

New objectives

* Discard the pre pandemic work models to adopt digitalisation till the last mile

* Collaboration among insurers to design customer solutions that are essential and economical

* Customers want hassle-free insurance solutions with no hidden costs

The writer is former MD & CEO, Star Union Dai-ichi Life

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