Although the Coronavirus (Covid-19) pandemic has increased customers’ awareness of risks and thus increased demand for insurance, insurers are counting on how to take advantage of the opportunity and transform their businesses to meet the growing needs of customers, speakers at the BFSI Business Standard Insurance Summit said. life.
“It is up to us what we do with this tipping point. We must not waste a pandemic; innovation is the key. If we build on our laurels to say that as an industry we have gone through relatively unscathed, I think we would have gone through relatively unscathed,” said Vibha Padalkar, MD and CEO of HDFC Life Insurance. We will lose this opportunity.
Basically, she said, not much has changed but visually it might seem like a lot has changed. She suggested that “innovation in the form of products, use of technology, partnership with insurance companies, and customer service in local languages are some of the things the life insurance industry should consider.”
Speaking similarly, Naveen Tahiliani, Managing Director and CEO of TATA AIA Life Insurance, said, “The opportunity is there; consumers are ready but the question is what are we going to do to respond to this opportunity. We can change our business model, simplify our products, make them more protection oriented, and use technology To give them a better experience, and to focus on quality.”
“The industry has been very resilient, but now we must build on this resilience platform and go into transformation mode so we can take our business model to the next level,” he said.
“There is a growing perception of risk coverage in the client base now. In the past 20 years, this has been the first time that selling insurance has not been this difficult. There is little to no attraction factor from the customer.
“The way we have been able to sell term plans and respond to clients, has not been an easy journey, given that the reinsurer has not been very helpful. It would be a huge loss if we didn’t retain the knowledge we had that transformed the industry even further as we moved forward.”
The life insurance industry experienced massive disruptions in the initial period of the pandemic. Later, the demand for life insurance products rose several times, but the supply-side constraints meant that insurance companies could not fully benefit from the demand. Despite this, the industry managed to achieve decent growth in fiscal year 21. Just as the industry was emerging from the shadows, the second wave of Covid-19 hit, causing another bout of supply side challenges.
“Growth was weak during the first period of Covid-19 and again during the second wave we had challenges. But, if I look at the overall picture, I will say, this is one of the industries that has been resilient. In the past year, we had 12 percent growth. “Despite the disruption caused by the shutdown. This year, so far, we’ve had growth of about 6 percent. So, despite the pandemic, I think that’s kind of a good growth rate,” said N.S. Kannan, managing director and CEO of ICICI Prudential Life Insurance. On the whole, the industry has held itself very well.
Raj Kumar, managing director of Life Insurance Corporation of India (LIC) said that during the pandemic there have been three challenges – customer acquisition, service and claims settlement. But the industry has risen to the occasion and new systems have been put in place to address the issues.
The pandemic has also given a boost to awareness around insurance. But there is a paradox. “While customers want to get insurance, they are facing economic pressures,” Kumar said.
The heads of the insurance companies said that the demand has risen, both for health and life insurance, and there is no doubt about that.
“We are seeing demand that is double what it was before Covid-19 hit. While the industry has done everything it has been a challenging process. The good news is that demand is still there and operations are much simpler than before,” said Yash Dahia, Chairman. And CEO of PB Fintech, the parent company of Policybazaar.com, the biggest problem is consumer inertia and Covid has changed that.
Talking about the competition that the industry will face from insurance technology companies in the new age, Padalkar said, these fledgling companies will not invest Rs 2,000 crore of capital, which is required to build a stable insurance business that can break even in 12 years. ‘ time. “Every old-world financial services company is looking to partner (with insurance companies) rather than compete,” she said.
Echoing Padalkar’s view, Chugh said, the answer lies in the partnership and the dissolution of what we cannot dissolve as legacy companies. “Fintech understands the consumer space and they have the ability to respond quickly and this is an area where we can participate,” he added.
“There are many areas where collaboration with fintech and insurtech companies can occur and we are looking forward to that,” said Raj Kumar of LIC. Not only is there cooperation between old companies and modern insurance companies, but there is scope for cooperation between insurance companies themselves, Tahiliani said.
“Life insurance companies have capital, risk management capacity, and investment capabilities,” Kanaan said. These skills will continue with us and the path we have to go is ‘Partnerships’.” We should encourage working closer with new age players by having skin in the game. He added that we should be allowed to create subsidiaries.
Balancing the theme, Suburb believes that long-term value will not only be added through pure technology or data play but through deep conviction in the sector.
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