Covid brought several significant changes and challenges. However, despite the economic disruption, reports suggest that the future of wealth management across Southeast Asia looks bright. According to the latest EY Future Consumer Index, the significance of financial planning amongst customers is rising fast in the post-pandemic world. It seems that financial planning is a part of everyone’s priority now and similarly, the demand for insurance, in particular, has picked up lately. Vinit Kapahi, Head of Marketing, Aviva India, during a recent exclusive conversation with Rashi Aditi Ghosh of Elets News Network (ENN) said, “Earlier, life insurance products that were only considered for saving tax are now becoming an indispensable safeguard against unforeseen scenarios.”
Excerpts of the Conversation:
- The pandemic has brought significant changes across the industries. How did it affect the insurance industry, in particular?
The pandemic has brought enormous changes across the industries and the insurance industry is no exception. We are experiencing changes in terms of operations, processes, products, services, and claims. Before the onset of the pandemic, insurance providers were moving towards digitization and the lockdowns acted as a catalyst and forced the whole process to go digital which has made opting for insurance a lot more convenient. And now not just convenience, but also the increasing awareness about health and life risks has made consumers opt for life insurance.
These uncertain times have made millennials and Gen Z take financial planning seriously. Customers now have easy access to information, multiple options by insurers, increasing levels of financial literacy. Customers are seeking personalized financial instruments, which has led the Life insurance industry to adopt flexible policy terms, premium payment terms and give customers the benefit of choosing how and when they pay their premiums.
Earlier, life insurance products that were only considered for saving tax are now becoming an indispensable safeguard against unforeseen scenarios. Hence, the insurance industry is witnessing a positive shift in awareness about life insurance products and their benefits.
- Do you see an increased demand for market linked products, post the pandemic?
The importance of financial planning amongst customers is increasing at a fast pace in the post pandemic world. The Central Depository Services (India) opening a record 1.47 million accounts in January, up more than threefold from the same month in 2020 is testament to the growing appetite for risk. Market-linked products have seen an increase in demand as the markets have been performing well since the outbreak of the pandemic. Unlike the previous generations, new-age Indians have a higher appetite for risk. As a demographic, India’s population is getting younger and, the demands of the younger generation are changing. With access to technology, they are making decisions backed by research.
At the same time, the pandemic has made consumers realise the importance of insurance, as it provides security against unforeseen scenarios. Moreover, unit-linked insurance plans provide the benefits of both wealth creation and insurance, and hence the growth in affinity towards ULIPs can be observed. The ease of tracking of investments, low-cost structure, and convenience of adding a rider or top-up and withdrawal of money makes it more attractive.
- Would you like to tell us about Aviva Fortune Plus? What makes it unique as compared to others?
Driven by our focus to ensure that our customers should feel confident in their decision to safeguard their loved one’s future, we have launched Aviva Fortune Plus, a Unit Linked Insurance Plan designed to offer dual benefits of investment that is wealth creation and insurance. The plan provides flexibility to the customers to adapt the policy basis their needs to provide life insurance cover and enhances wealth with the opportunity to grow one’s savings.
Aviva Fortune Plus offers an exciting feature of returning at least 100% of the charges paid by a customer during the policy term, at maturity. The plan also allows customers to choose the policy term, premium paying term, and the premium amount and design their plan as per their needs to get the maximum benefit. Another feature is that customers can extend the coverage by 5 to 10 years beyond the original maturity date. The customers can choose one of seven funds as per their risk profile. In addition, customers can opt for additional protection against Accidental Death, and the plan offers the flexibility of partial withdrawals, free switches, and premium redirections to manage their investments.
Aviva Fortune Plus is a life insurance plan that makes money multitask; it not only provides life insurance cover but also returns the charges at maturity to further enhance our customers’ wealth and this sets it apart from other products in the market.
- Are you witnessing a change in perception pertaining to ULIPs amongst tier II and III cities and millennials? Is there an inflated demand?
Growth in demand for ULIPs is being observed. These are customers who want the best of both worlds, investment, and insurance under a single integrated plan. Insurers are constantly striving to simplify the digital experience enabling hassle-free transactions which is also contributing to the changed perception towards ULIPs.
Customers in tier II and III cities and millennials, are looking for avenues to invest but usually don’t have a huge appetite for risk. The best option in this scenario is ULIPs leading to growth in demand Moreover Partial withdrawal, ease of adding top-up, return of charges are few of the features that have made ULIPs a popular choice amongst costumers.
- How have you planned your innovation calendar for the rest of 2021?
Innovation is a constant process at Aviva. We have a track record of creating solutions which cater to the needs of the customers and offer superior benefits. We are constantly listening to the voice of our customers and have great focus on the observing the environment around us. This helps us identify the needs (latent or otherwise) and helps offer appropriate solutions for the customers. We introduced digital tools like AI-powered chat, cloud telephony and even educated our customers on how to start a live chat or video conversations as face-to-face interaction.
Aviva Fortune Plus is being launched having observed the growing affinity of customers towards ULIPs. Moving forward our plan remains the same, coming out with products that align with the needs and goals of our customers.