As the insurance industry is on the verge of the new decade, it has different hopes and expectations from the new decade as the times are changing. However, the last decade should also be analysed for the lessons that it gave. The decade was impactful as it spelled various changes in the insurance sector as companies moved to technologically developed ways of marketing their products and customers became more aware of the need of insurance. Even the insurance regulator brought about eventful changes in the structure of insurance plans which revolutionised the insurance segment. This increased the gross written premium to INR 578,000 crores in the financial year 2019 and insurance penetration also increase to 3.69% in the year 2017 as against 2.71% in the year 2001. The last year of the decade is also expected to promote insurance growth taking the insurance market to a value of INR 19,56,920 crores by the end of the financial year 2020. (Source: Outlook India)
The growth figures are quite spectacular and they depict a positive outlook of the insurance industry in 2020. This is because of new developments happening in the insurance segment and the adaptation of the segment with changing customer needs. Let’s have a look at some trends which would define the insurance segment in 2020.
- Customer is the king
Insurance companies are increasingly channelling their focus towards fulfilment of customer’s needs. A positive customer experience is the target for many companies as they believe that a happy customer is a loyal customer. Thus, insurance products are becoming more customer-centric with increased benefits for the policyholder. The buying process has been simplified and companies are also allowing customers a one-point solution for claim settlements. Even in 2020 the trend of serving the customer would continue and the customer would rule the insurance segment.
- Technology would dominate operations
Thanks to the development of technology, insurance companies are now able to streamline their operations. Whether it is issuing a new policy or settling a claim in an existing one, technological developments have made the process easy and simplified. Moreover, companies are able to mine data through big data analytics to understand customer preference and needs. With data mining and analytics it has become easier for insurance companies to understand the needs of their customers. They are, therefore, offering simpler, better and more relevant plans which fulfil the needs of customers.. Chatbots are also becoming quote common wherein customers can ask their queries and get ready response from the company in real time. In the coming years too, technology would be increasingly used by companies in their operations.
- Increased internet penetration is proving good for business
One of the contributing factors to the growth figures of the last decade is the popularity of internet. Internet penetration has rapidly increased making it easier for customers in the remote corners of the country to find and buy suitable insurance products. This has led to an increased volume of business which has also increased the gross written premium for insurance companies. This trend would continue in the new decade making it easier for companies to sell insurance and also for customers to buy it.
- One-stop shop for multiple insurance needs
The last decade saw a growth of online insurance platforms and in the last couple of years, the concept of PoSPs (Point of Sale Persons) has also emerged strongly. Both insurance platforms and PoSPs have widened the insurance distribution channel. They have also eased the process of buying different types of insurance policies as they act as one-stop shop for multiple insurance products. Thus, it has become easier for customers to find different types of insurance plans either on the website of insurance platforms or through licensed PoSPs. Both insurance platforms and PoSPs are expected to remain in demand in the insurance distribution model in the coming years too.
These key trends would define the insurance industry in 2020 as companies would try to begin the decade on a good note. In all these trends there is one common factor which is the customer. The trends aim to simplify insurance for customers in terms of finding the most suitable policy for their needs, buying the required policy and settlement of claims.
As the insurance segment becomes more customer-centric, you would also be benefitted. As a PoSP you can offer your clients the plans that they need. As these plans would be sold online the purchase process would also be easy. With companies simplifying their claim process, your clients would be able to get the benefit of quick claim settlements which would increase their trust in the insurance company. As a result, your business would also grow and you would be able to generate more income. So, 2020 would prove to be a good year for the insurance sector. You can too reap the benefits of the insurance trends and make 2020 a good year for you too.
