As the COVID-19 pandemic disrupted the world, it has triggered significant shifts across all major ecosystems in the world. Some of the most impacted sectors are the health care and insurance. According to PwC’s report this year, only 14–16 percent of Indians have a health insurance plan in place. However, the current global pandemic has nudged more and more people of all ages to invest in life insurance as a security measure to protect their loved ones.
Let’s look at some of the major post-COVID shifts taking place in the life insurance industry across the world.
India has the second-highest number of COVID cases in the world, leading to more digital goals in the insurance sector. The spike in consumer interest to buy insurance has nudged insurance companies to make deep investments in digital transformation.
Insurance companies are racing to ensure that consumers can purchase insurance products online, pay premiums and conduct other transitions, online in a seamless manner. The process of underwriting has also become swifter as companies can no longer afford physical visits and exhaustive approaches that take too much time.
The race to acquire more consumers has encouraged businesses to re-imagine the entire journey of consumer acquisition to retention and servicing. So, when buying insurance, ensure that your provider has a seamless digital interface to enable all your future transactions.
Another issue currently being resolved in the life insurance industry is creating access to insurance policies in digital format. Often, the policyholder’s next of kin is unable to locate the physical copy of the document, causing delays in claims. The Insurance Regulatory and Development Authority of India (IRDAI) has now given special permission for terms policies to be issued in digital format, an exemption valid till December 31. The ideal scenario is for all policies to be available in a digital format to ensure a seamless claim process, especially in a time of deep distress. Ensure that you have digital copies of all your insurance policies and that your loved ones have access, too.
Growing interest in term insurance
The pandemic has also nudged more and more primary breadwinners to opt for term insurance. This is because the premiums for a term policy are much lower for a larger sum assured. Plus, term insurance offers a wide range of coverage options that can support families after the unfortunate passing of the policyholder.
HDFC Life Click 2 Protect Plus, for instance, is a plan that empowers the policyholder to secure the daily requirements of the family, by way of a monthly income under the Income and Income Plus Option.
The ideal life insurance cover for term policies must be least 5-10 times the annual income. This enables the family to cover liabilities and manage expenses for a good five to seven years without the policyholder’s income.
A shift to digital acquisition strategies
Google’s trend analysis clearly indicates that more and more users are searching for life insurance policies online. Digitally savvy businesses that invest in SEO and content marketing are likely to win newer markets. Another trend is that businesses are leveraging digital communities to reach out to potential consumers as well as building a network of consultants with access to large, untapped communities.
Innovate to stay ahead
The pandemic has forced insurance companies to re-imagine all aspects of the business cycle: from customer acquisition to retention. Innovation, and the ability to leverage technologies like AI and Machine Learning, while combining it with empathy and top-notch customer service, will help businesses stay ahead.
So companies need to fundamentally shake up their business models and accelerate their digital transformation by investing in technological tools to meet evolving consumer needs.
This is a partnered post.