The COVID-19 pandemic may have done what no amount of marketing has been done by insurers, but are still working to create awareness, build trust, increase ease of process and improve access to boost entry levels in India. There is an urgent need to do more for this, said executives from several insurance companies at ET’s CEOs Roundtable ahead of the flagship National Insurance Awareness Day.

According to the Economic Survey 2022, insurance penetration in India – measured as a percentage of insurance premiums to GDP – has seen a steady growth of 4.2% in FY12, but it is still much higher than the global average of 7.2%. is less. Life insurance penetration in India was 3.2%, roughly equivalent to the global level of 3.3 per cent, while non-life insurance was at 1.0%, lagging behind the global penetration of 3.3 per cent.

Industry leader Amit Malik, CEO and MD, Aviva Life Insurance Company Limited, Satishwar, at an ET CEO Insurance Roundtable on ‘Simplifying Insurance for India: Rethinking Products and Processes’, ahead of National Insurance Awareness Day on June 28 Balakrishnan, CEO & MD of Aegon Life, Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance and Mahesh Kumar Sharma, MD & CEO, SBI Life Insurance discussed how Indian insurers need to increase their insurance penetration in India and There is a need to leverage technology to meet the changing needs. of customers.

at the ET CEO Insurance Roundtable – one of a series of discussions that are part of
An ET.com initiative to promote financial literacy for the next billion users The CEOs of insurance companies also highlighted the steps that need to be taken to build greater customer confidence in the insurance industry as well as improve access to insurance in India or beyond metros for first time online users.

Need for more awareness building

Insurance in India has been focused on traditional products from the beginning, but it was due to the COVID-19 pandemic that people realized the need for insurance to ‘future-proof’ their lives, rather than just treating it as a savings tool. In or an investment product, Mahesh Kumar Sharma, MD & CEO, SBI Life Insurance said in a panel discussion moderated by Miloni Bhatt, Digital Broadcast Editor, EconomicTimes.com.

Underlining the reasons for low insurance penetration in India as compared to other countries, Sharma said, “One of the things that we need to take forward is to educate people about the importance of insurance in their lives. And they need to be explained why insurance should be a part of their overall investment or future-proofing philosophy,” Sharma said.

With increasing digital penetration in the wake of the COVID-19 pandemic as well as the consequent change in consumer behavior reshaping the insurance industry in India, digitally savvy customers seek personalization and flexibility, among other features, in their insurance products. are doing. Moreover, the boom in the insurtech industry and an ecosystem towards the use of new age technology like AI, Big Data etc. is changing the way insurance is traditionally provided in India.

Still, more needs to be done to improve insurance penetration among various sections of the population, including the self-employed, said Satheeswara Balakrishnan, CEO and MD, Aegon Life, as a large percentage of India’s population is currently covered by the insurance safety net. exists outside. ,

Balakrishnan pointed out that around 80-90% of the people in our country are uninsured and even within 10% of the insured population, a major part of it is the salaried people. This means that access to insurance is particularly low among the self-employed segment of the Indian population, who make up a significant portion of the working population.

Digital access to reach India

“This whole gap can be bridged only when we make insurance 1) very easy and 2) very accessible. And the only way to reach this population is using digital. And digital is the only medium I think That might insure the speed and scale to reach our vast country and really go into the interiors,” Balakrishnan said.

He further added that it was really based on the way digital has actually penetrated a lot of rural and small towns in India. For example, rural India actually has a 20% higher internet presence than urban parts of the country.

“Just to summarize, if I really look at the entire population, which is (largely) self-employed and the country has a large population, what we call the India location, then those people are getting completely excluded. ,” Balakrishnan said.

A study conducted by Policybazaar earlier this year – to understand the changing consumer sentiment towards insurance buying, household finance and investments in the last two years of the pandemic – also found that people from tier-2 and tier-3 cities Now showing an interest in insurance products.

improving access to insurance

CEOs of various insurance companies said that beyond technology, insurance companies need to build greater customer confidence in the industry and improve access to insurance by rethinking various procedures and regulations, such as the GST rate for insurance products, CEOs of various insurance companies said. ET CEO Insurance Roundtable, launched as part of the ET.com initiative to promote financial literacy for the next billion Indian online users.

visit Website: ET Financial Literacy

Amit Malik, CEO and MD, Aviva Life, while sharing his views on 18% GST rate said that it is important that the GST rate for insurance products is reconsidered.

“The new chairman of the regulator has a vision of saying ‘Insurance for every Indian’, which is great and it is very positive. In order to expand the market, I think it is important that a prudent decision is taken. That what is the correct GST percentage out there, (which) will definitely make the product more accessible,” Malik said.

Echoing similar views, Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance said, “I strongly believe that things which are meant for social good cannot have higher GST. Let’s look at the GST, which is very low, and health insurance (which is) 18% GST, so there is a clear mismatch. I think it should be looked into and it is not something to talk about. shame on us.”


building trust in the industry

On building customer confidence in the insurance industry and simplifying the entire claim settlement process, Singhel said that the solution to the problem for the industry is to actually make the payment claim process frictionless for the customers.

“Suppose, 20 to 40 years ago, you had no means other than to send physical people there to look at stuff; you had no means of being able to process claims frictionlessly because now when your You have cameras, you have digital submission of documents, you have a lot of evidence, you make the claims process very frictionless and very straightforward,” Singhel said.

“So I think the problem to be solved is how do you make the claims process so frictionless that the customer thinks, ‘Wow, how cool was it to insure.’ that they are not paying the claims. This is the frictionless part, where the trust part comes in, which needs to be resolved,” Singhel said.

Insurance customers on digital today enjoy better service due to end-to-end digital experiences leveraging technological applications which, in turn, is expected to fuel the growth of the industry. The insurance market is expected to reach approximately $222 billion by fiscal year 2026, with new online delivery models such as business to consumer (B2C), business to business (B2B), and business to consumer (B2B2C) being the key drivers . According to a recent report by RedSeer development.

To be clear, CEOs of Indian insurance companies agree on the need to leverage technology to meet the insurance regulator’s goal of reaching a larger segment of the population and providing insurance to every Indian.

For more conversations that are part of the ET.com campaign to promote
Financial Literacy for the Next Billion
,
Please visit our website.