Life Insurance : A new lease of life, and not just a tax-saving tool
Though the year 2021 had its share of challenges, it also had several opportunities primarily driven by increased awareness and need for protection which helped the life insurance industry to turn headwinds into tailwinds. Standing by customers in their ‘moment of truth’, insurers worldwide began providing protection solutions to help people fight the Covid-19 battle.
Proactive measures were taken to make the processes easy and interactions seamless, to deal better with the second wave. Claims started hitting and coupled with operational modifications created some degree of pressure for the insurers. Despite this, life insurers stepped up their game to cope with the situation and ensured that their customers were well-supported.
Pricing pressure no barrier for term plans
The pandemic prompted individuals to opt for life insurance policies to protect and save their finances. This increased awareness along with the emergence of the second wave, led to heightened interest in pure protection (term plans), despite a hike in their premium rates. This trend reinforced that in the past one year, life insurance further evolved from just being a tax-saving tool to a comprehensive and reliable financial protection solution for people.
Making experience easy
Customers’ preference for easy processes and digital channels prompted life insurers to further expand their service channels, providing more options to engage through physical branches, phone-based contact centres, chatbots, WhatsApp, mobile apps, social media, etc. Self-service took centre stage in 2021. This empowered customers and insurers to engage real-time, on desired channels to enable faster resolutions.
Outlook 2022, another differentiated year
The sector is preparing well to make 2022 another differentiated year which holds a lot of promise. Today’s customers have realised the need and the real potential of life insurance. This coupled with higher income, healthcare inflation, need for retirement planning and the heightened need for mortality protection is set to offer necessary tailwinds for the life insurance industry and will influence two vital trends:
Affinity towards life insurance products
Individuals will continue securing their future financial responsibilities with term plans and guaranteed return plans. There will also be increased demand for child products and retirement solutions. Wellness will emerge as a key trend which will lead to innovations in the space of protection and health-related covers. Insurers will focus on bundled offerings with hybrid features, innovative bite-sized or context-based solutions will be designed to appeal the customer needs of the next normal.
Technology redefining customer experience
Technologies such as machine learning, combined with growing digital connectivity, will enable substantial leaps towards offering customers increased transparency, on-the-go access, speedy transactions and need-based customised solutions. In 2022, companies will further strengthen their use of the decision engine or next-best-action technology to have relevant insights about customers, do need-analysis and thereby suggest appropriate products in line with an individual’s needs and behaviour.
The pandemic-induced awareness provided a window for life insurance companies to raise insurance penetration and ensure that the customers are adequately protected, something the industry could not achieve in the last 10 years. Relentless and disruptive innovations across the customer life cycle journey will help the industry to further drive desired changes. All these trends will accelerate the industry’s growth path in 2022 as well.