On the cusp of a new growth phase
Twenty years ago, around this quarter, the Indian life insurance industry was opened up to private players. Around 11 of them commenced operations then. A lot has changed since, but it is opportune to strengthen the foundations and commence the journey into the new phase.
The industry is guided by a strong regulator whose direction and support has enabled several players to set global benchmarks. Leading global players brought in best practices through partnerships with local business houses. Life insurance products were being customised to needs such as a child’s marriage or buying a house. Agency-led insurance business saw the distribution network grow along with bancassurance.
Over time we saw the digital revolution emerge within the industry. Online services being offered via agents or branches were being made seamless and processes made faster. I believe it’s this keen eye that helped us steer well through the financial crisis that hit us in 2009.
The last decade was where we augmented our tech journey, further customised our product offering and invested to ensure that customers’ experience with us was hassle-free. That’s when we made it possible for customers to purchase our products with the click of a button. The industry resurrected unit-linked insurance plans (ULIPS) to offer customers more value. Term-plans introduced in 2009 were made more affordable. Overall, insurers were innovating across products and services, and the discussion shifted to digital ecosystems from conventional brick-and-mortar stores.
The 16-odd months gone by did have an impact on industry practices, customer preferences, and the overall working cultures of companies. However, I’d like to also mention that we were in several ways geared up for these changes. Our digital ecosystems were stronger, offering more digital assets for insurance agents, bank partners and customers alike. Efficiencies and productivity was increasing with these tech interventions. More customer-facing and front-end tech enhancements were seen among players.
Embracing deeper digital solutions like artificial intelligence and robotic process automation is resulting in cost optimisation and operational efficiency
Hence, when we were all in the midst of the pandemic, we needed to enhance the usage of these assets to ensure our customers’ long-term financial goals remained on track. Customers’ risk perception was on the rise during the pandemic. With market volatility, guaranteed-return plans also saw an uptick. With the markets stabilising, ULIPS came back to the forefront.
Clearly, digitisation and virtualisation are the new reality. This landscape will further be shaped by the 3 Vs (video, voice and vernacular), from increase in online buying and servicing, to embracing deeper digital solutions like increased automation, artificial intelligence and robotic process automation. This is resulting in cost optimisation, operational efficiency and ensuring a competitive edge.
The life insurance industry has access to varied points of customer data. It’s perhaps among the few industries where the sales force (and agents) have such a close association with customers. The industry is now investing towards managing this data for customers’ advantage and to make the engagement more effective, more real-time. Data-driven solutions are the future, and several of these are now being executed with robust use of insurtech and collaborations with fintechs and other partners.
The industry is also showing promising signs of offering increasingly personalised products and services. The first step towards this is to simplify products. The sachet revolution that’s sweeping across the insurance sector is an excellent example of this. These are simple, more affordable, insurance products that are a good starting point for new customers.
These futuristic trends are already playing out in the industry. We’re undoubtedly going to witness a deep digital transformation as we evolve into a digital-first industry, with a farsighted regulator at the helm and ambitious insurance providers all working consistently to bring about revolutionary changes.