Focus On Innovation And Specialisation
The industry will see sustained growth, the distribution channels would no longer be the driver for sales but play a role of enabler in the whole ecosystem, and the customer will finally get the place that they always deserved – of being a King!
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By 2025, it is expected that millennials will be one-third of India’s population and India’s online user base will expand to 850 million. India will be among the Top 3 markets for insurers globally. Another area where the industry is poised to focus is on utilising the benefits data science has to offer.
I see insurance industry primarily revolving around two business models: (a) focus on big-decision products that include health, life, and disability, which would be largely purchased by the consumer for the creation of a safety net and (b) focus on products mandated by law such as motor insurance and travel insurance, as well bundled and usage-based products availed by the consumer during the moment of purchase.
With increased awareness and growing financial literacy, I see the consumer’s involvement in purchasing insurance to undergo a sea change. Businesses will also focus on consumer retention through insurance bundling. The cost benefits offered as a result will encourage the consumers to buy more products from one insurer rather than multiple players. Apart from economics, it also makes insurance one-click purchase a reality and facilitates ease of buying.
While a lot of online growth has happened on the basis of price and deep discounts, these clearly are not the only factor for a customer, or even the most important factors anymore. Today’s customer habits have changed. I see the industry submitting to the consumer desire and realigning itself in near future and 100 per cent insurance payout will be a reality for general insurance, much like life insurance.
Going ahead, players in the market will need to innovate constantly to fulfill the aspirations of the consumers. This implies introducing new offerings. While bundling will continue to follow a closed architecture approach, more insurers will resort to an open market architecture, where they would be selling multiple products from different companies. Many would postulate as to why would an insurer sell product from someone else’s stable, but this change will be driven entirely by the consumer behaviour, and the players will have to conform to the emerging marketing dynamics, which will be forced upon the industry. Thus, also reinforcing the fact that in the free market, it is the customer who calls the shots!
The future growth of the industry will be fuelled by the desire to enhance customer centricity. It is here that technology will play a huge role. New innovations such as AI integrated with big data will allow businesses to serve their customers and will be heavily relied upon in the future. AI will not only enhance customer experience, but it will also play a phenomenal role in creating a lean and efficient workforce. Installation of programmes into the system of such AI-enabled bots shall ensure accurate servicing and user-friendliness. The insurance policies being explained, evaluated and confirmed through talking operating systems is surely the future. Individual advisors, who are able to adapt to the changing market dynamics and are able to equip themselves with modern informational communication tools, will survive the technological shift that the industry will undergo over the next decade.
I envision death, disease and disability insurance becoming a part of the mandatory financial planning of Indian households. Technological advancement and customer-centric innovations will improve transparency and facilitate higher levels of trust, which has traditionally been a barrier for the industry to realise its potential. The industry will see sustained growth, the distribution channels would no longer be the driver for sales but play a role of enabler in the whole ecosystem, and the customer will finally get the place that they always deserved – of being a King!
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.