How the pandemic remodelled the insurance industry

COVID-19 has led to a paradigm shift in customer awareness, perception and product preference patterns for insurance products. Prof Veena Kumar, Director, CEC, explains why this calls for changes in the traditional advertising script and a shift towards near paperless digital transformation. 

Prof Veena Kumar

While the COVID-19 pandemic has destroyed businesses across sectors, it has precipitated a surge in demand for insurance products, be it in protection, health, guaranteed return etc. The uncertainties that have gatecrashed into our existence have made insurance a nudge product rather than the push product we have normally considered it to be, and customers are now highly aware of insurance options available to them. It is expected that behavioural patterns, especially of youngsters, will change. They will no longer see life cover as an expense, but a necessity. 

There has been an uptick in term and guaranteed plans, as risk perception has increased. According to IRDAI, 130 new insurance products have been launched since March 2020. Health insurance policy enquiries have also gone northward by 30-40%.

There’s a lot of headroom for brands to grow the category, as penetration is at 3.7% against the world average of 6.31%. When there is uncertainty, people prefer to shift their investment portfolio to annuities. The annuities business is really picking up and giving good volumes. 

There is a remarkable shift in the product landscape for this sector. General and health insurers have offered two products specifically for COVID-19 – an indemnity-based product and a benefit-based product. There is a sharp rise in demand not only for health insurance products but also a higher demand for cyber covers. The sector has witnessed an increased influence of digital modes for insurance purchases.

How the pandemic remodelled the insurance industry

IRDAI has moved to make the sector more risk-free and changed the scope of health insurance. Life insurers are not to offer health covers that reimburse the actual expense of hospital stay by the insured, but the total life cover bought. Much of the new cover bought has been for long-term insurance, not treating investment as a savings plan but as life protection.

The challenge for companies is to source business via retail channels and reach out to customers: the biggest challenge given the low digital penetration.

Insurance companies are endeavouring to target micro needs with new products developed in the post-COVID-19 era. For instance, Max Bupa Health Insurance introduced both comprehensive and short-term products in the last few months. Interestingly, 43% buyers of the company’s Corona Kavach, which is a short-term product, are in the age group of 18-30, a consumer segment not worried about health insurance earlier. 

Simplicity in product design and the overall buying experience is clearly a major category trend in 2020. At Edelweiss Tokio Life Insurance, Sonu Sood who is hailed as a “real hero” for his work in helping migrant workers return to their hometowns, was roped in to launch a new product called ‘Active Income’.

Communication, Care & Concern

Insurers are also coming out with premium payments in easy instalment options, helping people to opt for health insurance. Brands are providing entertainment options, sharing information, educating customers and busting fake news through their posts, memes and videos, helping build a lasting relationship. The key responsibility is to continue providing financial guidance to customers and consistently practise empathetic communication. Edelweiss Tokio is building a large cache of content for its customers, advertising more than just its products and services.

Max-Life insurance has a Covid-19 section on its website. ICICI Prudential life wants to assure customers of the claim’s settlement process remaining unaffected. LIC has been relaying information about the virus while telling customers how to keep safe. Realising the scale and impact of the virus on regular businesses and customer psyche, many brands are also tying up their promotional efforts with relief measures. 

Some of them are in the form of relaxing premium payment norms; for instance the largest insurer in the country, Life Insurance Corporation (LIC), gave more time to policy holders to pay premium falling due between March and April and assured its policyholders that any death claims arising out of COVID-19 will be dealt with urgently.

Companies are also adopting the brand positioning of total solution providers. For instance, Aditya Birla Capital has been hosting Facebook Live sessions with diverse health and financial experts, so that its communication remains always-on and relevant. It ran programs like #MoneyforLife and #HealthfromHome. The brand also went the audio-only route through podcasts as more people become comfortable with listening to content while doing chores in the current stay-at-home culture.

General insurance companies are exploring new means to simplify the customer journey. Bajaj Allianz General Insurance has a ‘Caringly Yours’ app where, for instance, images of damaged vehicles can be uploaded by insurers to avail claims. During the lockdown, the company pitched in with a ‘pay as you consume’ product for motor insurance and also introduced a health insurance product with a ‘co-pay model’ in association with GOQii; a smart-tech enabled, integrated preventive healthcare platform.

Even as companies swiftly realign their strategies to confront the challenges post-pandemic, industry experts also feel it is time to flip the old ad script as well. Mohit Joshi, MD – India, Havas Media Group, says, “The pandemic has in some way made the category’s selling job slightly easier” as awareness increases and new needs emerge. However, he adds, marketers will need to take creativity up a few notches. An approach based on a scare-to-sell strategy might not be as effective on an already fearful consumer.

A digital transformation in the making

There is definitely a higher adoption of digital services compared to the pre-COVID world wherein contactless experience is the new normal. Around 40-45% of consumers are getting influenced by digital modes while deciding to purchase as compared to 30% before pandemic. This evolving ecosystem will open up new channels for growth. All players have increased their social media footprint, leading to a change in customers’ buying behaviour as physical interaction has gone down. 

Data-driven technologies are ensuring a transformation across the entire value chain. Future Generali India Life Insurance (FGILI), for instance, moved steadily towards a digitally-enabled omnichannel distribution model since 2015. It deals with sensitive personal data of its policyholders and has close to 100% SLA standards. With the right investments in IT, it has achieved 100% backup and 99% recovery success. They have segmented data covering voice and video calls with agents and call centres’, AI bot interactions etc.

The company’s digital initiatives and technology models helped it respond quickly to COVID-19, and kickstart business continuity plans even before the national lockdown. The technology partnership has revolutionized their definition of ‘up-time’.

Customer expectations have started dictating insurers’ distribution experience. The demarcation of online vs traditional insurance buying has ceased to exist and the aim is now primarily ease of access for customers.

Hence, a tough task that insurance companies faced was to equip and train their agent advisors to sell through digital interactions. The agent channel, which caters to 41% of new life insurance business premium and 36% for health insurance, had to be shifted to a work-from-home set up within days. 

At Edelweiss Tokio Life Insurance, ‘Dial For Success’, a digital learning tool for its sales force, was launched to adapt to new needs. And it helped in business continuity. 

For Bajaj Allianz Life in Jharkhand, digital adoption post lockdown has jumped over 70% against a nominal 20% before the lockdown. WhatsApp, Bot & Apps have brought its customer grievance down by 90%. It gave customers a missed call service option, which was then transformed into an outbound call. Usage of digital tools and good management of the customer service ops has led to a better conversion rate.

They also started tele-medical underwriting where doctors inspected customers on phones and shared their reports. Health claims were submitted earlier via courier or submit to the nearest branch but now customers can upload the documents on the mobile app or scan and send on the portal. App ‘Caringly Yours’ was launched where customers themselves could check their level of exposure called Self Insta Check. Contact tracing on Social Trackback was rolled out before Aarogya Setu. If bots fail to answer complex queries, they were immediately addressed by humans.

Canara HSBC OBC Life Insurance relies on a robust technology infrastructure to offer non-intrusive service. They have seen payments through online mode double, self-servicing through IVR increase by 11%, multi-fold increase in uptake on WhatsApp registration for servicing. All aspects: insurance buying, claims management, accepting support documents online and allowing customers to use self-service options are available on the website with the help of digital bots and AI driven IVR.

IFFCO-Tokio General Insurance has seen the benefit of early investments in AI/ML, RPA through a quick revival in business post the initial shock. Aviva is deploying video chat bots to take customer experience to the whole new level. HDFC Life claims to be the first insurance company to make policy buying experience completely online. The ‘detect-protect-monitor’ package takes care of security concerns so they can focus on providing value for their customers. Few of their key differentiators are vulnerability detection, attack blocking and near real-time reports. These initiatives have helped HDFC Life protect itself from DDOS attacks with 24/7 support for expert help on security. The company leveraged its digital capabilities and integrated all its onboarding digital enablers together on a single collaborative platform, bridging the physical and digital divide completely.

Insurance India

The distribution network of ICICI Prudential Life Insurance is well armed with virtual collaboration tools that allow them to organise virtual meets with customers, utilise the digital platform from any handheld device to conduct a need analysis and onboard customers. It has activated over 40 service request options on its digital platform.

During Q1, FY21, around 400,000 transactions were completed via WhatsApp, and around 92,000 customers downloaded the mobile app. Adoption of digital technologies such as Artificial Intelligence (AI), Machine Learning and Robotic Process Automation solutions have enabled us to deliver uninterrupted service to our customers by replacing the physical handshake with a virtual one.

Digital solutions have ensured the possibility of the ‘Claim for Sure’ service initiative, which assures settlement of all eligible death claims within a day after receipt of all documents. Customer verification is completed digitally via OTP without the need of a physical customer declaration form. The same is inbuilt in the online application form. The company has integrated it with DigiLocker, and customers can view or download their welcome kit from DigiLocker app,

ICICI Prudential has started making use of nudge engines to provide relevant, customised messages and alerts about the pre-approved sum assured offerings without need of income documents or medical requirements, and present them with best-possible products based on the social media persona.

In the instance of Exide Life Insurance, they required a mobile-based CRM platform for two reasons – rate of errors in paper-based forms and higher lag time. It took a lot of time for customers to sign the proposal and agents to collect and deposit it in the office. Corrections, if needed, would further increase the time lag. A substantial amount of time would be lost if there have to be some corrections in the form which required the salesperson to go back to the customer.

Mobile made Exide accessible 24X7 and also helped it get the right data from customers. Since the platform is digital, certain controls can be set up to verify email addresses and contact numbers. Another huge factor to go mobile was speed. The moment the agent completed the sales process with the customer and hit the submit button, the proposal would be with Exide immediately.

A by-product is that it saved the company some money and make them greener, by reducing paper consumption by 95%. Everything other than customer signature has been digitally transformed. While they stood at 80% adoption of this technology, it went up to 100% post-COVID.

Covid-19 played a big role in enabling insurance companies to achieve near paperless digital transformation. As mobile adoption continues to grow, organisations are becoming more flexible in work arrangements and more open to transform traditional desktop-based applications to mobile space. A mobile strategy is no longer an option. It is quickly becoming a necessity.


Prof Veena Kumar, Director, CEC, is an established Management Consultant, with 30 years of experience in Corporate Training, Research, Management Education and Consultancy.

She is engaged in conducting in house as well as open training workshops in the Sales and Marketing as well as Behavioral disciplines for organizations. To name a few: like Tata Power Solar (Noida & Bangalore) Map My India, TERI, NetWork 18, Samsung, The Lodhi Hotel, HPCL, Jindal Steels, Jabra Innova, HCL Info systems Ltd., DP Jindal Group, Oberoi Group Of Hotels, Honda SIEL, HCL Radico Khaitan, RMS Technologies etc

 Strategic Selling Skills, Negotiation Skills, Customer Relationship Management, Competency Mapping, Strategic Marketing, Training The Trainers, Customized MDPs, Managerial effectiveness, Presentation Skills, Problem solving and decision making, Professional & Personal Effectiveness etc. are some of the areas for which she has been conducting training workshops. She has a very rich teaching experience as a Visiting Faculty to prestigious Management Institutes of Delhi.

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Pankaj Jhawar
Pankaj Jhawar
6 months ago

Amazing article

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