The Indian insurance sector has been witnessing tremendous growth over the last decade. It is projected that by FY2020 the industry will reach a market size of USD 280 billion. The success of the insurance industry is linked to the economic growth of a country. A robust insurance sector supports risk-taking in the economy since it provides security in terms of unforeseen circumstances.
Government policy reforms, rising adoption of technology and positive demographics sentiments have contributed to this steady growth. Many insurance companies in India have expanded their operations, across both the public and private sector. This reflects the vibrancy of the industry in the country. But when it comes to the digitization of selling insurance, there are still some inroads to be made. There are several hurdles that contribute to this.
Challenges in the Insurance Industry
1. Lack of Trust
The reason many individuals don`t bother with insurance is prevalent mistrust in the industry. This has been created due to years of mismanagement where insurance firms have failed to pay claims in time of emergencies or the process of claims have taken too long to be resolved. So, most people view insurance as something of an unnecessary expense.
2. Ample Competition
There are many insurance firms in the industry today. India currently has 57 insurance companies, 46 of which are from the private sector. So differentiating from the competition is an inherent challenge for insurers. Building trust in such a crowded market is difficult. Most people tend to distrust newer insurance brands since money is an important commodity and no one wants to take risks with it.
3. Channel Legacies
The insurance industry has been solely reliant, for the most part, on channel agents who facilitate policy sales. As per PwC India’s Insurance Technology Adoption Survey 2019, 55% of the respondents mentioned that they continue to prefer buying insurance from agents and brokers. Strong, established agent channels would tend to view digitization as a threat to their jobs.
4. Costs of Traditional Marketing
The recurring costs in traditional marketing can prove to be a huge investment that may or may not give a good return. Many methods used in traditional marketing are expensive and cost-prohibitive. It is also difficult to keep track of results when using older forms of marketing. While traditional ways of marketing can be effective, it's not without drawbacks of smaller margins or returns.
Opportunities in Digital Insurance
1. Changing Business Model
Despite the continued trust in insurance agents, emerging technology is already being integrated to facilitate customers. From chatbots to aggregators/online platforms, the insurance industry is slowly moving online. The use of technology along with human resources will help in calculated and informed decision making while making lives of insurance advisors easier as well.
2. Building Trust & Credibility
Online channels provide the right opportunity to guide a customer through the sales funnel. The top of the funnel has to do with building proper brand awareness through various means available. This will not only help to clear some of the misconceptions about insurance brands that customers have but also help in building trust and credibility in their minds. This would help insurance brands in the long run.
3. Customer Engagement
A strong focus on customer journeys and experiences is emerging as a key component in insurance marketing. Gone are the days of lengthy paper-based forms and multiple signatures. Customers today want a transparent and seamless experience with quick information/feedback. The online landscape allows for several opportunities to increase customer experience and engagement through personalized high-touch service. High-quality interactions lead to customer loyalty.
4. Technology-enabled Buying Process
Technology will inevitably become a key enabler to the insurance industry just like it has been a game-changer in almost all industries. Insurance companies need to invest in the digitization of their businesses and better leverage technology. Buying insurance online can be as easy as clicking on a button with multi-point assistance from agents on-call or information on the website. By creating behaviour and need-based personalized offerings, the entire buying process can be made seamless and hassle-free.
5. Nurture Existing Customers
While traditional digital marketing activities focus on getting leads, growth-focused insurance digital marketing also holds the key to nurture existing customers while acquiring newer ones. This is vital in increasing customer retention and overall satisfaction for any brand. Timely communication through emails or engagement through social media can keep these customers engaged with your brand. This will not only increase their trust but also can turn them into repeat customers and brand advocates.
The insurance industry is gradually moving into a new era fueled by changing consumer needs and expectations. Adopting digital methodologies and advanced analytics will be the key to delivering compelling new business opportunities. Adapting to a customer-centric approach that drives every interaction is the future.
At Amura, we have delivered powerful results in the insurance digital marketing space. We are a growth marketing agency specializing in data-driven, technology-led, experimental marketing approach. Feel free to get in touch to discuss possibilities for digitalization of your insurance brand.