Digital Life Insurance: What You Need to Know About it
Digitization has ushered in a new era in the market. With COVID-19, digitization has become an essential factor in ensuring and sustaining sales. The insurance industry has been forced to adapt as face-to-face visits to agents have decreased. Commerce, including the sales of financial products, has moved online.
However, the digital life insurance purchasing process isn't flawless or ideal for everyone. Here's what to expect when buying life insurance online, along with some shopping recommendations.
Even as vaccinations promise to lessen the effects of the pandemic, online insurance continues to evolve. Due to the dwindling life insurance sales, the industry has resorted to cost-cutting. However, a different method might be more fruitful. Breakthroughs in workflow automation and their deployment can help insurance service providers grow every consumer touchpoint. Also, the financial services industry and its security and compliance teams are becoming more receptive to cloud capabilities.
Industry trends are gradually converging, pressuring the slow-to-adapt insurance sector to change by challenging outdated business procedures and methodologies. To stay competitive, insurers are rethinking and realigning their business models to meet the needs of current customers as well as the expectations of future target groups who will likely become customers in the next 10–20 years.
Compared to developed and rising nations, India's insurance market is underperforming. In India, insurance penetration and density, which are critical performance measures for the market, are particularly low. Since these are the major factors progressing at a stagnant growth rate, India can still be called slow-paced.
Whether you buy an online plan directly with insurance companies or use an independent broker who represents numerous insurers, here's a breakdown of what you can expect now.
People: Customers have changed dramatically, and they now seek the most transparent and frictionless experience possible. Insurance firms must embrace the digital revolution or risk becoming obsolete.
Market Limits: Shifting rules and the government's disruptive role define the market boundaries that service providers must adapt to remain competitive.
Technology: Technology is a tool that not only provides insurers with new capabilities but it also creates new opportunities by introducing new business practices.
An insurer’s strategy must be focused on aspects like customer experience, engagement, ownership, corporate innovation, and technical leadership. Insurance policies, like any other investment, are subject to security threats, which can be risky for policyholders.
Getting the documents: Digital insurance has made the documentation process far easier, as an insured now receives an e-copy of all documents relevant to the policies. The policyholders are less burdened with managing documents, as they usually tend to lose the physical copy of premium receipts, policy cards, etc.
The customer service: Instead of the hassle of visiting the insurance company and waiting for your turn to ask your query, now you can simply post your query at the push of a button. Insurance companies have gone a step ahead and provided their customers with free premium calculators and interest calculators on their websites. A simple login will provide a customer with all the details regarding loans, premium dates, and repayment schedules.
Even though insurance companies earn from digital insurance, the role of insurance agents becomes more and more irrelevant as many consumers prefer to compare and buy policies online. Thus, insurance companies save a million rupees every year that would otherwise have been spent as agents’ commission.
In India, the digitization of services has raised client expectations in general. Customers in India have become more connected and vocal about their requirements due to the quick rise in social media use, growth in the number of smart devices, availability of on-demand services, and increased information security.
Still, some customers prefer human interaction when buying an insurance policy and for claims and settlements. These customers are usually older people or individuals who are not tech-savvy. Thus, they prefer an agent to help them when dealing with insurance products.
Some believe that there could be online frauds and scams. Hence, they prefer buying a policy with an agent’s help. With the rise in digital platforms, insurance companies are hopeful that these consumers will also gradually shift to the digital process with correct guidance and proper awareness. This may happen through social media or website tutorials.
Products such as term plans and ULIPs that require customers to know the nitty-gritty of investments and premium ratios are benefited more by digital insurance. This is because it allows them to see all the details easily and efficiently. A customer can update and change everything he/she needs online via digital insurance, which is more hassle-free.
Irrespective of the fact that the Indian insurance business has developed at an exponential rate over the past decade, there are still prospects for expansion. Growth comes from a combination of customer focus and market offerings, as well as improved capabilities, all of which necessitate continual investment. Squeezing a few bucks out of slow, unfocused operations isn't going to be enough to keep a business afloat in this highly competitive market. The insurance industry has yet to develop a consistent response to disruption. CEOs must think forward, putting innovation at the centre and defining how the digital ecosystem may be used to its full potential.