Although most insurance customers in India still prefer to purchase from an intermediary viz. an agent, bank or broker, the evolution of digital sales and service offerings is remaking the map of the industry. Consumer distrust of technology is being replaced by an expectation for the accelerated, highly personalized digital experiences they have every day. Whether it’s one-click shopping on Amazon or getting movie recommendations on Netflix, customers have come to expect instant fulfillment and service that is tailored to them.
Although insurance has been slow to deliver on those expectations—a new wave of digital offerings is starting to redefine how the industry interacts with consumers.
Online digital insurance offerings
In India, as in many countries around the world, insurance companies are waking to the growing customer need for online solutions. Insurers are developing new tools with innovative features to deliver the value their clients are seeking.
In many cases, these fresh approaches take the form of new types of products or plans. Indian insurance organizations are introducing novel offerings like microinsurance schemes, event-based coverage, and need-based solutions that do a better job of meeting the new needs of customers than traditional products. Solutions like a term plan that offers monthly income option to the insured post age 60 and micro-insurance focused to the semi-urban and rural customer base are becoming increasingly popular because they address very granular needs within the market.
Digital solutions revolutionize the customer experience—from browsing to sales to service
Customers today are looking for instant resolution. They want their enquiries answered immediately and they expect that the solutions they are offered will be tailored to their specific needs. The adoption of app-based sales tools and client portals now allow potential customers to view, compare, evaluate and buy policies at the click of a button.
In this transitional time, many Indians are beginning to use those digital sources to gather information on the products they need, but they then buy whichever policy they decide on through a traditional agent. We probably won’t see the elimination of agents from all transactions, because many insurance sales are simply too complex and require expert advice.
But the sales process is changing due to the development of more human-like digital ‘chatbots.’ Many companies are using these AI-enabled chatbots and other applications for simple levels of customer service. This means fewer resources need to be dedicated to providing basic levels of customer support, which reduces costs and frees customer care agents to spend time-solving more complex customer problems.
Data drives more highly targeted marketing and sales approaches
Big data analytics is being increasingly used by insurers to analyze voluminous amounts of data and generate customer insights into each aspect of the sales and policy cycle.The torrent of information collected about consumer preferences on a continuous basis can be used to build far more detailed models of customer needs than was ever possible before.
This data can be used to make marketing and sales approaches more highly targeted.Very granular data allows insurance companies to create smaller and smaller groups of prospects and clients who share very specific needs. These cohorts can then be approached at the time they have a need and are most open to hearing about a solution that exactly fits their requirements. The more concentrated the size of these groups, the higher the acceptance rates are likely to be. When we look into the future, it’s reasonable to ask if, perhaps the days of communicating with a client segment of just one person are not so far way.
Data analytics drives more effective product development
The same data analytics that generates business insights into client behavior provides a window into how to best modify current products or develop entirely new ones—and do so much faster. This has led to higher levels of customer engagement and enhanced customer loyalty as customers are presented with new products that have been customized to their specific needs.
The volumes of data from digital sources also have a positive effect on pricing. Insights into actual client activity give insurance companies the ability to customize premiums to better match a client’s behavior. More data means an increased ability to evaluate risk in each policy. And, it can be useful in predicting insurer’s risk when it comes to claims by identifying those customers more likely to engage in fraud.
Digitalization increases efficiency and reduces costs
When products are offered through digital channels—with no agent interaction and automated approvals and policy processing—insurer’s costs are greatly reduced. No commissions must be paid. Few staffs are needed to manage the policy lifecycle. And these savings, especially in the Direct-to-Consumer (D2C) channel, can be passed to clients in the form of lower product prices.
Digital improvements to traditional industry processes have added value to the entire chain. Automation is eliminating many manual steps in all insurance workflows and enhancing the quality of those processes. Less need for manual data entry has led to reduced human error. Onboarding, underwriting and claims are all accelerated when Robotic Business Processing (RBP) and Straight-Through-Processing (STP) are introduced. The bottom line for insurers is that implementation of the right technology can revolutionize the way they conduct business—it brings back-office operations into the 21stcentury and enables the creation of real-time, highly personalized digital experiences for all customers.
The growth of digital technologies in the insurance industry will continue to increase rapidly. However, ad hoc approaches to new technology adoption will not lead to the kinds of efficiency gains and ROI wins that many insurers expect. A strategic and unified approach is required because the full value of digital transformation can’t be realized until the entire value-chain is aligned and solutions are integrated to the benefit of all stakeholders.
End-to-end solutions must be implemented in an integrated fashion in order to fully automate and accelerate the entire range of processes in the lifecycle of a policy. Advisor-specific CRM, financial needs analysis tools, agency management solutions, modern policy administration systems and digital front-end tools all need to work together for the benefit of insurers, distributors, advisors and clients. And the solution set will need to continue to evolve to keep pace with changing consumer expectations and behavior going forward.
About the author
Rana Biswas is Sales Director, APAC at global digital solutions provider Equisoft. He has over 25 years of leadership experience in the Banking & Financial Services industry in India spanning across Retail & Corporate Banking, Life Insurance and Credit Cards Sales. Rana’s deep and hands-on experience in insurance sales and operations equips him with insights on the challenges and opportunities in this industry.
Views expressed in the article are the personal opinion of Rana Biswas, APAC Sales Head, Equisoft