How next generation of life insurance products focus on innovation and customer-centricity

The life insurance industry is undergoing a profound transformation driven by technological advancements, changing customer needs, and a shift towards personalized and on-demand services. In this era of disruption, insurers are embracing innovation to offer the next generation of life insurance products that cater to the diverse needs of customers. Let’s delve into the key drivers and trends shaping this evolutionary journey toward customer-centricity.

Understanding Evolving Customer Needs

Today’s consumers are ever more discerning and digitally savvy, taking recourse to chatbots and apps for multitude of information and services, that also reveal their preferences. Additionally, lifestyle shifts, and demographic changes have given rise to new risk profiles and coverage requirements. To remain relevant, insurers must respond to these evolving customer needs through a slew of innovative products; protection, health, pension covers, or long term guarantees with early and regular cash backs. Moreover, with businesses becoming more reliant on digital technologies, delivering value to a customer is not just about adapting one’s product suite, but also in offering the right mix of products with seamless and personalized services. In a big leap towards using technology innovation efficiently, policies have started getting issued digitally based on OTP consent. The real time feedback collected from customer filling online forms, or using a phone app can be effectively used to bundle several insurance needs such as medical coverages for ageing parents, car insurance on top of life cover for home loan repayment and home insurance.

Harnessing Technology for Personalization

Data analytics, artificial intelligence, and machine learning are empowering insurers with insights into individual customer risk profiles and preferences, which is used by them to tailor products to meet specific needs. For instance, using AI algorithms, an insurer can assess the health and lifestyle data of a young, health-conscious individual and offer a policy with enhanced coverage for critical illnesses and disability benefits. Likewise, for an older customer with a stable health history, the insurer may customize a policy with more emphasis on retirement planning and wealth accumulation.

Adopting Usage-Based and On-Demand Insurance Models

With the advent of IoT sensors, and other sources of real-time data, insurers can design policies based on actual usage patterns and behaviours, and hence there is a rise of usage-based and on-demand insurance models. For instance, health insurance plans can be customized based on lifestyle choices, and incentivizing wellness through regular fitness activities, balanced diet, and no smoking. Lifestyle choices can be tracked using a fitness app connected to the insurer’s platform enabling an insurer to reward the customer with premium discounts, cashback offers, etc. Companies have also  started using credit risk scores to correlate customer discipline and financial wellbeing with life expectancy. A good credit score reflects regularity of income and lifestyle, and indicates healthier and stress-free life.

Addressing New Risks and Challenges

The world is witnessing unprecedented challenges; pandemics and the looming and ever-increasing specter of fraud from growing complexity of business, expansion and rise of distributions and digital sales and threat of cyber-attacks. Insurers are incorporating these emerging risks into their product offerings through ML techniques and AI tools that can identify fake ID and impersonations. In addition, biometric data are fast becoming indispensable in KYC processes, and image-recognition tools are intrinsic to its success. Climate-linked insurance solutions are helping communities build resilience against the increasing risks of extreme weather events. Owing to the pandemic, corporate demand for life insurance coverage has also surged.

Simplifying Underwriting and Claims Processes

The next generation of life insurance products is characterised by streamlined underwriting and claims processes. Insurers are leveraging technological breakthroughs to automate these processes, reducing paperwork and minimizing turnaround times that cascade into efficient distribution delivering huge cost savings.

The need for frictionless, uninterrupted and simplified services like instant issuances and pre-approved life covers without much scrutiny are becoming reasonable expectations and an integral part of service level agreements, enhancing the overall customer experiences, enabling faster payment of claims making life insurance more accessible and convenient.

Even substitutes of medical underwriting are not uncommon anymore. New age techniques like video medicals and retina scan have gained momentum which can help approve a proposal at the blink of an eye.

The transformative potential of customer-centric innovation in the life insurance industry is immense. The advent of technology, coupled with a deeper understanding of customer needs, is reshaping the landscape of life insurance products that will continue to adapt and evolve and meet the unique needs of the populace while fostering financial security.

The author is Chief Insurance Officer at Future Generali India Life Insurance Co. Ltd. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.

Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.