Article Synopsis :
The digital revolution is spreading with the fearsome power of the coronavirus.
Insurance needs to overhaul its traditional ways of distribution and evolve its services by adopting a model that places the consumer at the heart of everything it does.
Growing middle classes want simple products that are easier to use, which has driven growth of protection, health, home and savings insurance products.
Ready for lift-off
India is experiencing a digital boom and it is driving change in consumer behaviour.
India’s government focused on improving digital literacy to transform the country into a digitally empowered society and knowledge economy.
It has the second-fastest rate of internet adoption on the planet, with around 45% of the population being connected. This makes It one of the largest digital consumers in the world.
Low-cost smartphones and improved connectivity have created an internet user base that is second only to China.
Safe access to all areas
Financial reforms have been driven by technology, such as Aadhar, the world’s largest citizen biometric unique ID.
This unique identification system already has 1.2 billion consumers enrolled and is used to improve financial inclusion by providing affordable access to financial services such as bank accounts, remittances, credit, insurance and pensions.
More than 318 million bank accounts opened under the government scheme.
This has also benefited the economy as capital flows into the formal financial system in the form of switches from savings to investments and insurance premiums, as has the collection of goods and services taxes.
Keeping the customer satisfied
Digital businesses in India are tailoring services to meet local consumers’ needs.
Paytm has more than 300 million registered mobile wallet users and more than seven million merchants available. These are available in 11 Indian languages offering mobile recharges, utility bill payments, travel, movies, event bookings, in-store payments at grocery stores, fruits and vegetable shops, restaurants, parking, tolls, pharmacies and education institutions through Paytm QR code, internet. In areas of low connectivity, some services are available via short message service (SMS).
A bright future
The success of the future model is providing these easy to access and customised services, but within a different model.
But insurers must realise they will have a different role to play. They will not be able to expect to ‘own’ the client from cradle to grave, but access their customers via others’ platforms or digital ecosystems.
B2B2C – business to business to consumer – is a familiar model already used in bancassurance and the auto industry, where the core products are bundled by third parties, adding value to the customer.
This trend will accelerate, as improved customer access via digital technology enables insurers to integrate insurance products into their partners ecosystem.
Provided they offer the right products at the right time – and big data make this easier to predict – insurers can anticipate higher levels of customer satisfaction ad loyalty.
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Digital Insurer's CommentsThe Indian market for digital consumption has already become the second largest in the world and will explode once coverage is universal.
To take advantage, insurers must do all the things that are important to success in other digital markets.
Indeed, much of the traditional distribution infrastructure is largely obsolete in this market, as the vast majority of consumers will have jumped from zero interaction to full on digital consumers.
Understanding this and adapting business models to meet this demand is absolutely essential.
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