Surviving the Pandemic through Contactless Insurance Services
The novel coronavirus pandemic has affected industries and businesses across sectors, and the insurance industry is no exception. The impact has been significant for both the general insurance as well as the life insurance sectors. Even though the insurance sector was highly under-penetrated in India, the pandemic and recent natural disasters have accelerated the awareness of the importance of insurance. Consumer behaviour is now changing as consumers are aware of the importance of insurance and contractual coverage that they can benefit from.
Other challenges that the industry faced were the preconceived mistrust regarding the sum insured, the kind of covers that are provided and if they will get the money during claim. Also, the industry faced a looming challenge of complexity that was another significant reason for people to remain uninsured.
However, with the new age and digital players stepping in, there has been a transformation in the way general insurance is perceived. Insurers were now looking at simplicity and hassle-free solutions. It was further quickened by technology-enabled solutions that make the process transparent and easy. Digital solutions have taken the centre stage, especially now when contactless is the new normal. The current scenario has created a surge in digitisation in all markets and created opportunities.
Using Technology as an Enabler
The concept of ‘Zero-Touch’ is growing as businesses, and people across the globe started looking for contactless solutions, considering the safety aspects. The advancements in technology, usage of cell phones and the feasibility of the Internet play a vital role in making solutions available to consumers. From ordering groceries to consulting a doctor — everything is now done online. General insurance companies have also taken multiple steps to offer zero touch or contactless services for their existing and prospective customers.
New-age general insurance players are empowering customers through technology-enabled solutions to make the process easy and solve problems fast. For instance, customers can now take new policies, renew their existing policies and claim their insurance in the safety and comfort of their homes. While these are challenging times, most insurers have also worked towards 100 per cent customer satisfaction with 24x7 dedicated support via calls and emails.
Online transactions have increased drastically over the past two quarters, which has led to an increased risk in terms of security. However, insurers have started to focus on cybersecurity controls due to the rise in digital operations and testing remote working and business continuity planning (BCP) infrastructure.
Traditional insurance players are also now moving towards digital solutions to match customer expectations. DIY solutions are now provided by new-age general insurance players to simplify the insurance process. In the case of motor insurance claims, customers can click the picture of the damage and submit everything online with the help of a guided solution. The DIY approach taken by such insurers has changed the way insurance is looked at by the customers.
Seeing an Increase in Demand for Insurance
The insurance sector is classified as an essential service. Combined with increased awareness of the importance of insurance, the demand for contactless insurance has increased. IRDAI (Insurance Regulatory and Development Authority of India) has also laid out several relaxations and guidelines for insurers to follow. India is traditionally an underinsured country in terms of health. According to a report by PwC, private health insurance schemes cover only 18 percent of the population in urban areas and 14 percent in rural areas. As the pandemic has raised concerns regarding health expenses and inflation, the health insurance segment has seen increased demand.
The automobile industry was already in a trough last year (FY2019-2020). The pandemic and lockdown further slowed the business, which directly impacted the motor insurance sector. However, with rising concern about safety and social distancing norms, people will prefer private vehicles over a shared mode of transport. It will lead to an increase in demand for two-wheelers and low-end or used cars that can be an opportunity for the motor insurance segment.
Online transactions have increased drastically over the past two quarters, which has led to an increased risk in terms of security
Home insurance is also seeing a momentum. Although there is huge under- penetration of insurance in India, especially for property and assets. However, now with the rise in natural disasters like floods in Kerala, Amphan and Nisarga the perception is changing. People are becoming aware of the benefits of insuring all kinds of properties, be it a rented house, own house or commercial property.
Offering the Right Contactless Insurance Products
The future of the general insurance industry largely depends on how the right products can be offered to match the customers’ needs and the economic situation. With the economic slowdown and loss of employment, the next few months might see a slump in the growth for the industry. However, there is a welcome change in people’s perception, and insurance is becoming an essential part of their life. ‘Zero-touch’ and ‘contactless’ insurance with the right digital processes in place will enable insurers to issue new products and settle claims quickly.