Digital Transformation in Insurance during the Time of COVID-19

In 2020, Digitization has become the ‘new normal’ not only in the insurance sector but across the industries worldwide. While COVID-19 continues to affect the insurance distribution globally, the insurance providers on the other hand are diving deep to prepare robust strategies to withstand the short and long-term implications of this pandemic, which shows no signs of ebbing yet.

We are already witnessing a profound change in human engagement, and how social distancing is moving personal interactions to digital channels. As social distancing would be the next normal, it will have a profound impact on the insurance distribution in both life and non-life insurance segment. Many insurers have already started focusing their strategies towards expanding digital customer service channels and remotely building new customer relationships to combat the next set of challenges.

Here is a Customer Archetype that the Insurance Providers Need to Tap

(Source: PwC)

Two key areas of focus to improve the conversion rate of these customers through digital mode are simplified products and increased customer awareness!

Emerging Digital Measures in the Insurance Sector

The Indian insurance industry has seen steady growth in the past decade in both life and non-life segment. As per the IRDAI, the premium growth rate for March 2020 was around 10% in the non-life insurance segments and 11% in the life insurance segment from new business.

Insurance intermediaries like Policybazaar have also noticed a considerable jump of 20% to 30% in Policybazaar health insurance coverage related inquiries in March 2020. The reason being that more and more people seeking protection against the COVID-19 virus that has affected lakhs of people worldwide.

Several insurance providers in India such as Max Bupa Health Insurance, Religare Health Insurance, HDFC Ergo General Insurance, etc. along with the leading insurance intermediary Policybazaar.com have ramped up tele-medical services to facilitate their customers. This will involve examining customer applications along with doctor consultations over the telephone.

With the ongoing pandemic, this would ensure that people can function without visiting the insurer or doctor in person and waiting in the queue. But the insurer can reject the claim in case of false claims or information and this goes for both life and non-life insurance segment.

Also, the onboarding process, medical check-ups, life insurance, and non-life insurance claims are made easier and quicker with Digitalization. Tele-underwriting, which involves interaction between the doctor and the applicant has made medical check-ups more convenient. It can be done by sharing the applicant’s medical history with the doctor and a video call over the phone. Insurers have adapted to the need for digitalization.

Introduction of Simplified Online Insurance Products

The introduction of standard products like Arogya Sanjeevani health insurance by IRDAI that anyone between the age group of 18 and 65 years can purchase online is one such initiative. It does not need to compare different insurance quotations as the product comes with fixed features and benefits across the insurance providers.

Bharti AXA Life Insurance recently introduced Health and Life Secure plan that offers financial protection and comprehensive health insurance and critical illness coverage under a single product, and this is another initiative to simplify insurance for the customers. And many more products are in the pipeline as per the requirements during the pandemic.

The idea is to bring uniformity in the insurance coverage across the industry and this is one such initiative towards it. As people are following social distancing and cannot visit the insurer office or meet an agent, such simplified standard insurance products would ensure seamless purchase through digital modes.

Setting up of Secured Digital Operating Models

The insurance companies are responding to the Coronavirus outbreak on multiple fronts – as Employers, as Claim Payers, and Capital Managers. And each role brings its own set of unique challenges, for the insurance industry as well as the society and the economy.

The transition to remote operations and work from home set-ups will need an increased focus on cyber-security as well. Digital engagement will hugely impact the components of the ‘Insurance life cycle’. Digital means of the KYC process, Underwriting, On-boarding, and use of remote sensing for surveys and claim assessment are expected to increase. 

As Insurance Operation models become more online-focused, the insurance providers need to adopt innovative measures ensuring employee engagement and securing work from home protocols along with data security and continuity in the operations.

Insurers need to equip their workforce with necessary tools, access rights, working practices, and technology providing work flexibility to operate remotely, especially with the need to minimize contact amid community and business disruptions.

Engaged supervisors need to maintain continuity so that the approvals and processes keep moving along with clear lines of communication. It may lead to raised stress levels due to the rising markets, demanding customers, and other challenges that come with remote working, which lacks the supportive infrastructure and working environment that one gets in the “office”.

The Way Ahead- Strategy and Brand Structure

The emerging digital trends will witness an impact on consumer preferences, purchase patterns, socio-economic and economic structures, new business models, operating models, virtual interactions, and government policies.

During the time of such a crisis, the true purpose of an Insurance Provider is to ease the stress and ensure peace of mind. Therefore, it is imperative to devise strategies for this crisis from stakeholders and customer’s perspectives. Insurers are taking measures including pre-approval of insurance claims, waivers of deductibles, and setting up of funds for frontline employers.

How they respond to these critical issues now will be important in establishing future relationships with the employees and customers. To demonstrate the true value of the society and economy, insurance companies should keep a close track of market developments and respond sensitively and effectively with the digital Omni channel approach.

Long Story Short

We don’t know what the next few weeks and months hold for us. However, during such time it is critical for both life and non-life insurers to devise multi-pronged strategies and ensure active response across all the scenarios at both segment and macro level. As the response window for a crisis can only be measured in months and it will take years to measure the recovery.

The future will depend on how the insurers build a digitized engagement and digitized delivery mechanism of the products offered, healthcare systems, and also how they implement government directives across all the elements. And the well-prepared companies will see more and quick recovery in the times to come.

Disclaimer: The views, suggestions and opinions expressed here are the sole responsibility of the experts. No Forbes India journalist was involved in the writing and production of this article.