The coronavirus pandemic is accelerating the use of digital platforms in India, providing insurance companies with a vital new avenue to connect and serve customers. This year’s consumer surveys and sales data show that the pandemic has quickly raised public awareness about health risk and insurance in India – and insurance purchases are rapidly moving to online modes, reveals the latest study by Swiss Re.
Supportive government policies and a spike in digital activity imposed by COVID are pushing consumers – and their insurance needs – online, according to the study. The growing presence of e-commerce and digital wallet applications presents opportunities for innovative partnerships between insurers and digital platforms to close the $ 369 billion health protection gap in India.
The survey results highlight the intensive use of digital platforms by Indian consumers and their preference to purchase insurance through them. Around 65% of Indian respondents are likely to use digital channels such as e-wallets, banking or insurance websites, and e-commerce platforms to purchase insurance in the future, indicating that major insurers have the potential to bring their offerings online and engage consumers in new technologies.
The Swiss Re Institute study, titled “Going Digital – Insights to Optimize Consumer Appetite for Online Insurance”, surveyed 1,800 consumers in India, Indonesia and Malaysia in June 2020 to understand their attitudes towards digital platforms and their perceptions of purchasing insurance online. The survey also tested their acceptance of selecting and purchasing six life and health insurance products suitable for digital platforms. The three Asian economies represent a combined population of over 1.5 billion people, with a burgeoning middle class increasingly reliant on technology and connectivity to drive their decision-making.
Respondents to the survey were decision makers within households aged 18 to 65 and had used digital platforms at least once in the three to six months preceding the survey. These digital platforms include e-commerce apps / websites, digital payment / wallet apps, health tracking apps, connected commuting platforms, among others.
“Health and safety measures aimed at curbing the spread of COVID-19 have now resulted in a clear paradigm shift towards digitization in the post-virus era,” said Hadi Riachi, Market Manager, Swiss Re India, adding, “With an increasing number of digital platforms extending their business reach to financial services, insurers must adapt their business models to become more relevant and responsive to the latest customer needs. “
“There is also an opportunity to bridge the digital divide by adding more 3G, 4G and even 5G connectivity across India to change consumer behavior, and that includes the way they buy insurance. Three-quarters of rural areas in India have mobile phone connectivity, according to an Indian government survey last year, ”Hadi said. “We have the opportunity to leverage technology to make insurance more accessible to disadvantaged people in our society, helping them and their families reduce their health protection gap.”
Increase readiness to purchase insurance digitally
The results of the survey indicate that digital platforms have a high penetration rate in India, with an average of 90% using these channels at least once a week.
Among them, digital payment apps such as Paytm are the most popular, used by 85% of Indian respondents at least once a week, followed closely by health tracker apps (84%), apps and sites e-commerce (76%) and connected suburban platforms (69%).
Digital wallet and e-commerce applications are most suitable for online insurance distribution
There is also a growing trend to search for insurance information and purchase insurance digitally. Traditional channels, such as insurance agents, brokers or aggregators, remain the primary channels for finding insurance information in India. However, 65% of respondents in India expressed interest in using online channels to purchase insurance.
Among the different types of digital platforms, consumers in India indicated a stronger preference for purchasing insurance through digital payment / wallet and e-commerce platforms. This preference is driven by respondents’ confidence in the platforms where payment / digital wallet apps were found to be most credible, followed by the website or apps of banks and insurers and trading platforms. electronic.
The combination of online and offline customer support will be key
When asked why they wanted to buy insurance digitally, the ease of application and getting the best premium rates were the top reasons in three markets. However, respondents also expressed various concerns when purchasing insurance online. 45% of Indian respondents struggle to choose the best product while 37% said there was no agent to help explain the terms.
“Our survey results show that while digital insurance is growing in popularity, offline support is still required due to the need for advice and support for certain products. It’s important that insurers take an omnichannel approach to complement the online customer journey with personal assistance to address consumer concerns. Hadi said.
Strong preference for critical illness insurance and simpler medical reimbursement on digital platforms
The survey tested six hypothetical life and health products to gauge consumer interest in insurance offered through different digital channels. They include medical expense reimbursement insurance, cancer reimbursement insurance (to cover cancer-related medical costs), critical illness insurance, cancer insurance (pays a lump sum upon payment). cancer diagnosis), hospital costs – parametric protection against haze / smog protection of construction workers.
The results show that Indian consumers (nearly 80%) are highly inclined to purchase cash for hospitalization and critical illness insurance through digital platforms, but the other four products also show relatively high interest levels (over 70%).
Opportunities for insurers and digital platforms to leverage insurance solutions
The survey illustrates partnership opportunities between insurers and digital platforms that will benefit the entire insurance value chain and unlock demand for new insurable risk pools.
Partnering and working with digital platforms and ecosystems will allow insurers to access millions of consumers who are often under-protected. Insurers should leverage data collected on platforms, such as health tracking apps, for personalized wellness programs and more holistic risk assessment by incorporating lifestyle factors such as physical activity and sleep. This could transform life and health insurance, where risks change over time and individual behaviors influence health outcomes.
At the same time, digital platforms can benefit from diversification of activities and increased customer loyalty by offering financial services online. Partnerships across industries can also offer digital platform expertise in different areas at low cost of failure and minimal risk to their traditional offerings.