How has the life insurance industry evolved post pandemic – The Financial Express

There is a need to embrace technology that transforms how you do business or engage with policyholders

By Manish Dubey

It is a whole new world due to the pandemic. The life insurance industry settled more claims in the year 2021 than in 2020 due to this Black Swan event. A sudden demand for life insurance policies and increased claims induced operational changes for the insurance industry.

As we head into the new financial year, there is no end yet to the anxiety as variants of the Covid-19 virus continue to emerge. Given improved economic sentiments, greater appreciation for its need and increased vaccinations, life insurance companies are expected to do a lot more in the new Financial Year (FY) 2023.

Industry discussions will revolve around emerging technologies, ways to serve customers more efficiently, responsible investing and broader financial protection of people in an industry, which is under-penetrated. Here are five crucial trends to watch out for in FY2023:

Digital advice and distribution

With prolonged lockdowns, businesses have adapted to a new work life. Those who work in financial services distribution are no exception. Insurers have invested in resources to provide online training to their distribution network. Insurance advisors earlier engaged potential customers in face-to-face conversations due to the challenges posed due to social distancing. They had to change to online meetings quickly. The advantage of online video conversations is that they can be done at any convenient time or even on-the-go. Using data analytics life insurance companies are enabling insurance advisors and brokers to pitch the right product at the right time. Advisors play an essential role in reaching out to customers therefore expect efficient and mostly digital conversations with your insurance advisor in FY2023.

Online customer engagement

Companies are adopting Artificial Intelligence (AI) to serve their customers better. For instance, ICICI Prudential Life Insurance launched LiGo, an AI-powered chatbot through which policyholders can give voice commands on their phones and access the policy information as and when needed.

“The total cumulative shipments of smartphones in India are expected to reach 1.7 billion over 2022-2026, of which, nearly 840 million 5G devices are expected to be sold in a span of five years,” a Deloitte report said. This, coupled with the widespread penetration of telecom services, allows insurers to engage with customers effectively and understand their needs better. All of that can be mapped to a solution-centric response without manual intervention. The role of AI and Machine Learning is crucial, and it would dramatically transform and enhance customer experience. We expect such engagements to intensify in FY2023.

Health and wellness

It is in the interest of insurance companies to nudge policyholders and potential customers towards a healthy lifestyle. At the same time, surveys have shown that customers are willing to share data if a healthy lifestyle could keep insurance premiums low. After all we all want to live a long and healthy life. There are companies which are already encouraging the use of smart wearables. In FY2023, one can expect insurance companies to develop extensive engagement on health and wellness. It could perhaps start a new relationship between insurers and customers.

Sustainability and Environment, Social and Governance

Among financial services companies, life insurers are better positioned to invest based on Environment, Social and Governance (ESG) principles under the broader theme of sustainability. The long-term capital that they hold is an enabler. They can invest in businesses that commit to environmental goals, sustainability, and better governance. ESG investing is gaining popularity, and it requires the backing of long-term institutional investors. A lot of paperwork is involved in the insurance industry. While it is impossible to eliminate paper immediately and completely, FY2023 could lead the way. As a policyholder, expect your insurance company to engage with you digitally.

New partnerships

Technology companies are disrupting businesses across sectors. Life insurance is no exception. The distribution of financial services is witnessing a dramatic change already. Application Programming Interfaces or APIs plugged into the system allow innovative products that could help expand the financial services market. It is already happening in banking, securities markets, mutual funds, and insurance sectors. Life insurance companies could tie-up with new-age start-ups to innovate and expand the insurance market if they register as insurance intermediaries. India is an under-penetrated market for financial services like insurance. The aggressive methods used by new-age consumer technology firms could help bring a larger section of the country’s population under the ambit of life insurance. In FY2023, you could find innovative ways to buy life insurance products. It could therefore be an eventful year for new partnerships.

The financial year 2023 is expected to see a strong rebound in economic activity. Financial services, including life insurance, would continue to witness the unwinding of pent-up demand. For insurers, it is a time like never before. There is a need to embrace technology that transforms how you do business or engage with policyholders. The agile strategy was already in the works for most companies before the pandemic. Life insurance companies need to raise the bar on the agility to make the most of the opportunity in FY2023.

Disclaimer: The views are that of the individual and do not necessarily reflect the views of the organisation.

The author is CMO, ICICI Prudential Life Insurance Company Limited

Follow us on Twitter, Instagram, LinkedIn, Facebook