The impact of the Covid-19 pandemic on the insurance industry globally was governed by the massive change in consumer lifestyle and priorities. While the demand for Property & Casualty insurance services like auto, housing, travel etc. plummeted, the awareness about life insurance soared dramatically, as people were forced to think about long-term security. The Life Insurance industry globally is now growing faster than in the past few decades. The US market, for example, is seeing an all-time high in the demand for life insurance products.
The pandemic brought in a new set of challenges – teams had to work remotely, and distributors did not have enough digital tools to engage with prospective buyers, IT infrastructure like servers etc were traditionally managed from the office, and insurance operations weren’t geared to support customers remotely, maintaining the service became rather difficult.
The insurers discovered the need to understand customers (existing as well as potential) better. Collaboration with partners is now key to creating an array of bundled insurance products that are of higher value to the customer. Digital transformation and cloud migration are on top of the agenda for most insurers. Here are a few things that will support Insurers in capitalizing on this increased demand and riding the next wave of growth:
Tailor-made products and services: Insurers have an incumbent need to leverage demographic data and AI-based models to understand customer profiles and launch products that address those specific needs. There’s a huge potential for upselling to existing customers by understanding their evolving needs – across life stages. Similarly, there is a need to understand distributor profiles, and their customers and launch products that could be best distributed through existing distributors. The time to market to launch products needs to be reduced significantly, in order to steer ahead of the competition.
- Build a strong ecosystem of distribution partners: To penetrate the market and meet the multifarious needs of the customer in today’s lifestyle, insurers need to look beyond conventional distribution models. Specific products need to be designed in collaboration with complementary service providers like cabs, e-payment solution providers, hospitals, online retail players, other financial services, and others. Standalone insurance products will be limited in their appeal to the fast-evolving customer. Besides, the multi-pronged collaboration will offer access to an exponentially large user base.
Insurers need to interface on a real-time basis with varied service providers like hospitals, repair shops, adjustors, and a large network of distribution partners, and aggregators, among others. Therefore, it is essential to create systems that can be easily integrated into the larger ecosystem and allows easy exchange and integration of data.
- Build IT infrastructure that is scalable and agile: The pandemic showed us how unreliable is the demand. Besides such crises, the nature of demand could vary through the year, in different locations, and so on. In India, for example, one sees almost 30 to 40% of business in the JFM quarter and out of that, 40-50% of deals close in March as the financial year closes. This could mean around 5000-10,000 policies being rolled out in a day for some insurers, especially in the last week of March. This is unmatched as compared to any other time of the year. Sporadic demand like this requires IT infrastructure that is easily scalable for short periods and is agile enough.
- Facilitate distributors for better sales and service – For life insurance products, distributors are the face of the insurer. They must be well-equipped to pitch suitable products to the customers and help them make informed decisions. With the worldwide web at their disposal, customers are now more tech-savvy and conduct comparative research online. This makes the role of the distributor even more critical in offering accurate information, supporting the customer with data and insights that are relevant for their age and life stage, helping the customer in completing process-related documentation and claims through easy-to-use tools, and addressing all possible queries in the shortest possible turnaround time.
Insurance companies are increasingly looking at digital transformation and cloud migration to meet the aforesaid needs. The companies that embrace the change quickly, will have an early mover’s advantage.
At C2L BIZ, we believe in thinking differently and challenging the “status quo” through our highly configurable, transformative solutions that are cloud-native, futuristically designed, easy to use, and lend a competitive edge to our customers.