Distribution leadership strategies for General Insurance’s retail segment

General Insurance’s retail side has seen significant evolution and associated growth in recent years. Insurance distribution models in India have accordingly kept pace with these paradigm shifts, notably in terms of catering to customer behaviour changes. This is a significant achievement when we consider the push product nature of insurance.

Insurance becomes top of mind for customers only in times of need, especially for major general insurance lines like motor or health insurance. These may be in the form of a car accident or unplanned hospitalisation. So, insurance is always a push product, one sold through conversations. Distribution plays a significant role in such conversational sales.

Channel mixes that matter

India differs from global insurance markets which are intermediary driven. Multiple forms of distribution are non-negotiable in India due to the market’s complexity, linguistic differences, and digital maturity. From a distribution management standpoint, this means a complicated stakeholder mix.

Right from traditional agents and Bancassurance, all the way to e-commerce players and brokers, each distribution channel taps customer segments uniquely. This is inevitable since general insurance’s penetration in India is hardly 1% of the overall GDP. Since the global average for the same is over 3%, India still has a long way to go. All forms of distribution will play a significant role in increasing this penetration.

Recent rise of digital channels enables insurers and distribution players to get closer to customers, especially the younger demographics. Even as these create possibilities like comparison shopping, one stop purchases and product bundles, overall distribution ownership remains with the insurance industry.

Competitiveness is a key differentiator at this point. Customers have multiple options to choose from, as multiple ecosystem players compete to reach out to them. For instance, motor insurance has OEM players. In the case of health insurance, agents reach out, or banks offer insurance services. This results in a highly competitive environment where players work with multiple partners to stay relevant and meet customer needs.

Changes in the marketplace impact competitiveness impact all insurance industry players. It is crucial to be agile and adapt quickly to stay at the top of this game. Slow to respond participants will lose market share.

The Customer-First Distribution strategy

Innovation and transformation must start with a customer-centric focus. This calls for a “Customer First, Technology Next” approach. It is important to understand the customer’s needs and challenges to create a solution that adds true value. This calls for a dedicated focus on great customer experiences, rather than the latest buzzwords.

For example, the latest trends might revolve around Generative AI or Blockchain. It is important to not force-fit such technology into inappropriate or ineffective use cases. Identify a suitable use case and then determine the right technology.

Leading Indian insurer Bajaj Allianz General Insurance’s streamlining of the underwriting and claims processes provides great insights into such possibilities. Traditional policy issue processes require distributors to collect and submit documents prior to the underwriting process. By empowering customers to manage the underwriting process, Bajaj Allianz General Insurance ensures efficient and transparent experiences for all parties. Digitization ensures that a substantial number of insurance policies can be issued directly by the distributor.

Similarly, technology aids Bajaj Allianz General Insurance to simplify its claims processes. Earlier, filing and processing a car accident claim required time intensive steps like damage assessment surveys and reports. An AI-based solution has been able to simplify these to a two-click process.

AI-powered claims processing using the mobile app allows Bajaj Allianz General Insurance’s customers to take photos of the damage and upload them for claims up to certain limits. An AI engine assesses the extent of damage and conveys the claim amount within minutes. This innovative solution allows the insurer to compress a former multi-day process to just 20 minutes.

The end results? More confidence in Bajaj Allianz General Insurance among its distributors, even as it offers a unique value proposition for the customers.

Transform technology for India

Adoption at scale across different customer segments must be top of mind priority when implementing technology tools in Insurance. Bajaj Allianz General Insurance approached this with a digital transformation journey in the days prior to the COVID pandemic. It started with a clear mandate to avoid niche use cases.

The contact center figured prominently in Bajaj Allianz General Insurance’s list. This resulted in building chatbot-driven journeys for the contact center’s most complex customer interactions. In the process, Bajaj Allianz General Insurance became a pioneer in offering chatbot access through WhatsApp (now an industry standard).

Bajaj Allianz General Insurance zeroed in on the Indian customer’s receptivity to mobile phone usage. It became clear that customers were comfortable using the chatbot through WhatsApp. As COVID hit and created call center shutdowns, Bajaj Allianz General Insurance seamlessly migrated its customers to digital tools. The insurer reports a digital adoption rate of 80% at the peak of the pandemic due to this proactive step.

The customer contact channels metrics at Bajaj Allianz General Insurance reveal interesting insights. Since around 80% of its customers utilize digital assets to reach out, it is a great indicator of customer experience. It indicates customer comfort and confidence in using these online tools. A whopping 83% drop in customer complaints is a testament to the insurer’s digital strategy’s success.

Bajaj Allianz General Insurance has been able to sustain its penetration of digital servicing in the post pandemic era. Even as many retail customers prioritize call centers, the insurer reports a synergistic coexistence of its digital customer facing channels. These translate to a highly efficient hybrid model.

Success stories like Bajaj Allianz General Insurance chart the way forward for insurer success driven by conversational sales and optimal distribution management strategies. Talk to us on sales@c2lbiz.com to discover Customer First Digital Distribution Transformation strategies that will accelerate your insurance business’ growth.

This Thought Leadership blog post is based on an InsureTalk episode featuring K. V. Dipu, the Head of Operations and Customer Services at Bajaj Allianz General Insurance. Head over to YouTube for Dipu’s perspectives on how the ‘Humanization’ factor is essential for successful digital transformation journeys.