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BW Businessworld

Millennials, Insurance And Everything In-between

Changing trends in business have often proven how disruptive, impactful new models can unseat the old ones

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I’ve never been a big fan of management speak. And for all the talk (and books) on customer being king, I find that true customer centricity still remains frustratingly elusive.

There are some brands that are the exception rather than the norm – Apple for one, and Amazon being another. These brands proudly wear customer centricity on their sleeves, and rather than state their purpose, they choose instead, to live by it. Amazon is, as you may know, ‘Earth’s most customer-centric company, and Jeff Bezos is not just committed to, but possibly obsessed  with, customer loyalty. This is evident from Amazon’s unbiased product reviews, recommendations, to the runaway success of Prime. Apple, on the other hand, has held onto its cult following, years after its launch. Ever tried going to an Apple store? The Genius Bars and the Genius Groves make the simple act of waiting to be served, as pleasurable as being actually served. I’m told that Tim Cook personally responds to customer emails and has vigorously fought to protect users’ right to privacy. Not surprising then, that both brands have touched the USD 1trillion in valuation milestone not too long ago.

Let’s now cut to the practice of selling insurance. Quite a fall from grace there, don’t you think?

Insurance, slow to the race

Contrary to what scores of insurers and intermediaries will have us believe – insurance has never really been a subject matter of solicitation. In fact, our parents and grandparents would probably vouch for how they were convinced into buying policies through a local broker who often doubled up as a financial advisor as well. Given that policies were often churned out like an assembly line production and sold en masse to buyers, it left unsuspecting policyholders open to many pitfalls when the time came to claim their covers. But, does the buck really stop here? To some extent, the traditionally rooted mindset of Gen S, mired in complacency, had also been culpable in making insurance a laggard. 

The holy trinity of Change, Innovation and Progress

Changing trends in business have often proven how disruptive, impactful new models can unseat the old ones. Netflix started out with its video rental service in the late 90s and almost sold itself to Blockbuster. As luck would have it, the brand spotted a change in consumption patterns, pivoted and thrived offering affordable content online. The rest as we know is history and, today, Netflix is now hardwired into our viewing habits as well as the pop culture lexicon. 

It is not surprising that in this New World, the same consumer will want a reboot of how they purchase insurance and the engagement they have with their policy providers. A policyholder’s attention and loyalty are emerging as hard-earned prizes. And refereeing this transformation are the incumbents and the freshly minted new players, offering an assortment of innovative phygital touchpoints to keep up. 

Creating differentiation…

…for the digital natives. Even buying cars, a high-touch, aspirational and in-vogue product has transformed with the rise of this new populace. Back in the day, there would be minimum of 3 visits to different showrooms, interactions with sales agents, and that final famed test ride. If it satisfied your adrenaline and made peace with your wallet, pen was put to paper and you had a shiny, new vehicle to flaunt. The rise of digital has disrupted this as well, except the test drive experience. From stocking up on the research and knowhow online, buying car through an e-commerce store and access to millions of customizations online, a large part of this journey now resides online. 

How are the rules of the game changing?

Self-service is the new norm - Changing beneficiaries, updating address and contact information, or renewing policies has often had a manual component to it. In fact, IRDAI announced in April that around Rs 15,167 crore was lying unclaimed with life insurers and among them, one of the major reasons were the absence of a self-enabling platform to get policyholders to routinely update their whereabouts and basic details with insurers. Today’s hyperconnected millennials are eager to stay ahead of the curve, try out new tools and tactics and feel empowered to make their own decisions. As a result, insurers will have no choice but to digitize processes so that the onus of fulfilling fundamental requirements such as submission, policy changes, claims intake can rest reliably on the consumer. 

An insurer can also be an advisor - Imagine you are surfing at the Gold Coast of Australia and have shelled out several hundreds of dollars for a surfboard and an unforgettable experience. Your friendly insurance helper, monitoring your data and travel insurance plans, sends you a reminder for a personal liability insurance and an international health insurance. With all the details already fed into the system, a customer only needs few more seconds to complete the purchase. Consumers are looking for curated, pre-emptive advice that adds value and makes them feel safe and secure.

Customer service that is immediate and responsive – Whether it is a supermarket chain, a smartphone giant, a legendary motorcycle brand or the hip and uber-cool electric car brand, customer service is not a department in isolation any more. In fact, it is a strategy which makes or breaks a company (remember Airbnb?) With a simple, nondescript box on a white page, Google embedded speed, efficiency and relevance in its servicing DNA. Be it questions on information of products, premium frequency change, smooth resolution of claims during an emergency, customers want speedy redressal of their issues, minus the red tape and a labyrinth of calls and formalities.

Going an extra mile to build loyalty - Lack of touch has always been the proverbial thorn in insurance industry. As customers have changed, their preferences have changed, and they want more qualitative engagement, going beyond core functions of buying policies and claiming covers. Insurers are moving away from selling in isolation and creating programs that feed into this loyalty - concierge services, reward for healthy living, emergency support, car maintenance notification and discount and many such endless possibilities.

We are a far cry away from the days when insurance was complacent with the unanimous identifier of it being a ‘low-touch sector’. Today, there is much more at stake and the entire army of insurers, aggregators, start-ups are finding new ways to create meaningful experiences. To some extent, the storm has started brewing in the US already. Lemonade, a P2P, AI-powered Insurtech start-up has understood the science of engaging with millennials and captivated the demographic with lightning fast onboarding, submitting claims, superior yet affordable products and more pay-backs than traditional heavy-weights. Perhaps it’s time that Indian insurance gets its place under the sun?

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.

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A.S. Narayanan

The author is Founder & CEO, McXtra

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