India: Life industry sees transformative change – Asia Insurance Review

Speakers at a virtual seminar organised by the National Insurance Academy yesterday mentioned that the COVID-19 pandemic has resulted in an uptick in the sales of insurance products and also how collaboration between different stakeholders has helped increase penetration levels over the past year.

The annual CD Deshmukh memorial seminar with the theme: “Reimagining life insurance business models in the next decade”, looked at the opportunities and challenges life insurers would face over the next decade.

NIA director Mr G Srinivasan said that over the past two years there has been a tremendous shift in how people view insurance. “Customers are looking for solutions and not just standard products, and today’s ecosystem is conducive to the use of technology and the industry must adopt this for greater customer connect and service,” he said.

Highlighting the huge potential of the insurance industry in India, he said that, currently, a large segment of the population is still outside the insurance net. Furthermore, among the insured, many are underinsured and so there is a need to design and sell simplified products and to leverage technology. “Business models are undergoing changes in the manner in which they provide insurance solutions to people,” he said.

Redefining customer engagement

IRDAI member (Life) Mr K Ganesh in his address said that the COVID-19 pandemic has been a huge test for stakeholders in the life insurance segment, including for customers and insurers. He highlighted the many positives for the life segment over the past two years, including the fact that the market is now accepting life insurance as a protection tool, a shift from the earlier popular concept of it being a savings tool.

“The pandemic has brought home to people the benefits of insurance and subjected the industry to a test of resilience,” he said. He mentioned how the penetration level in the life segment increased from 2.8% in 2020 to 3.2% in 2021 and is now closer to the world average of 3.5%. He expects the growth momentum to continue into 2022 because of the ongoing pandemic.

“We have successfully faced the pandemic’s challenges, and moving forward, the industry needs to redefine customer engagement and challenge itself with a long-term vision,” he said.

Distribution channels

Life Insurance Corporation of India chairman Mr M R Kumar spoke on how the life industry is moving ahead with the power of transformative change that is helping it bridge the protection gap. He said that in the wake of the COVID-19 pandemic, companies are increasingly adopting digitalisation, a trend that is here to stay. “Insurers must reimagine their product offerings and journeys and explore partnerships as the next decade will redefine their future course,” he said.

He mentioned that life insurers in the future, apart from developing core digital platforms, will also adopt bionic and omnichannel distribution models. “The industry needs to reinvent skills and capabilities and knowledge value, technology and partnerships will be the need of the decade ahead,” he said.