Insurtech brings significant acceleration in insurance space

Casparus J H Kromhout

Gen Z comprises of new-age customers today and would become the primary customers for the insurance industry going forward. The generation is believed to be very fast-paced, tech-savvy, and accepting of changes. To know more about the collaborative approach with insurtechs, Casparus J H Kromhout, Managing Director & Chief Executive Officer, Shriram Life Insurance, had an interaction with Shruti Jain of Elets News Network (ENN).

How do you see the life insurance landscape in India?
The life insurance industry in India is in an interesting place at present. The recovery from the pandemic has been good and has accelerated awareness of the need for life insurance.
However, life insurance penetration levels are still low in the country indicative of the scope for growth and improvements.

The market environment and customer behaviour have changed with the fast-paced adoption of digital over the last two years. This has not only helped increase education and awareness in the country but has also opened up new distribution avenues. The demographics of the country continue to be very dynamic, and we have also seen a rise in the income levels of consumers.

Though generally considered a laggard in the very adoption of technology, the insurance industry, pushed by the pandemic, has managed to move fast on innovation and digital solutions. We have also seen Insurtech companies making an impact in the industry, more on the general insurance side but the life industry is not immune to the disruption either. Technology is driving and would continue to drive how the industry landscape moves forward.

In addition, the government and IRDAI have been every proactive with the recent changes that facilitate growth and penetration in the country.

What is your core product strategy to serve people in the lower income bracket?

Across our customer segments we believe in bringing solutions rather than simply providing products. We strive to innovate and bring unique solutions to families that need them.

While the company serves customers from all market segments, the core strategy is derived from the Shriram Group’s focus to serve customers from the lower income group and where financial services are not easily accessible to customers. SLIC has a strong purpose to provide protection cover to individuals from the vulnerable segments of the society, where the need for insurance is critical. Most of our customers are in the income range of Rs 2-5 lakhs and the loss of a breadwinner can have drastic outcomes for these families.

Furthermore, approXimately 44 per cent of our customers are from the rural segment. In this customer segment, the need for insurance in terms of the solution, distribution and sometimes even service is unique. Innovation and continuous improvements in offerings are critical to be able to serve and reach these customers.

A lot of our solution strategy for this segment is driven by research and inputs from the market. For example, the bulk of our customer segment comprises of farmers or small businessmen, with seasonal income cycles – meaning they earn money at some period of the year. In addition, there is an uncertainty in the number of earnings due to factors like the weather conditions. We try to offer solutions where they will be able to pay
for their life insurance, keep their coverage and not lose it if they don’t have money.

The key is to provide a holistic solution to serve our customer base efficiently for which we do a lot of technical innovation and have tie-ups with fintech and Insurtech.

How are you driving the Gen Z generation to insurance?

Gen Z comprises new-age customers today and would become the primary customers for the insurance industry going forward. The generation is believed to be very fast-paced, tech-savvy, and accepting of changes. Many studies also point towards, and experts believe that the Gen Z population would be more driven by security and high levels of awareness.

Thus, I believe that there is a possibility that the inherent demand for insurance is higher in these younger customers. However traditional and current products or even methods of selling might not be as appealing to this generation.

With SLIC’s approach towards innovative solutions for its customer base, we would also continuously work towards offerings that can attract the younger customer base, especially with a smarter use of technology, more effective communication, and efficient distribution. Customised solutions that are simple, cater to their needs, those that can be easily understood, and come with some additional value would be crucial to attracting the Gen Z population.

What is your take on a collaborative approach with insurtechs?

Insurtechs have brought in a lot of energy and movement in the insurance space. We have seen a lot of innovation from Insurtechs especially in the general and health insurance space. Insurtechs bring with them a deep understanding of technology and solutions to business problems.

SLIC does a lot of technological innovations – we have adopted tech solutions across the life cycle of our customers right from the point of sale where our sales people are facilitated by mobile applications, to various tech-driven service options like the mobile application ShriMithra and our AI-driven solution ShirA, and also up to our claims settlement process where we are now able to settle non-early claims within 12 hours even in the remotest of rural regions. Thus, as a part of our future strategy, SLIC is open to new technology advancements and to collaborations with tech companies and insurtechs.

At present, we have tie-ups with some insurtechs and tech providers. However, our collaborations in this space would be determined by our core strategy of serving our customer base. This focus would continue and synergy in providing solutions to these customer segments is what we would look at while partnering with more insurtechs.

What are your expansion plans for 2023?

SLIC is currently ranked 8th on the number of individual policies sold in the private segment. Thus, we are operating at relatively larger volumes but with Technology-drivenlower ticket sizes. We would continue to work towards reaching more customers driven by the purpose to provide financial security.

Also Read | 5 Upcoming Trends in India’s InsurTech industry

SLIC provides solutions across a whole range of customer segments and as aforementioned, with 44 per cent of our customers originating from rural areas and 50 per cent of our claims arising from the same segment, our key focus would be on rural.
We would aim to strengthen this focus and our reach in this segment, and thus be able to expand further into the country. Technology driven deep rural would drive most of our expansion in this segment.

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