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Indian consumers understand the value of life insurance more than ever

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Guest Column: Vinit Kapahi, Head of Marketing, Aviva India, details ways in which consumer behaviour towards insurance has involved

The pandemic brought an enormous change at a global level while impacting everything from day-to-day lives to businesses. Business, travel, trade, economy and all the other sectors underwent a transformation and changed the way we saw a lot of things operating a couple of years ago. Insurance industry also experienced a shift in paradigm in terms of their operations, processes, products, services and claims. While everything was witnessing major changes, such as social distancing, wearing masks these industries also saw a shift in the adoption of behaviours that were already gaining traction, such as the digitization of shopping, banking and more.

New-age Indians are unlike their previous generations. As a demographic, India’s population is getting younger and with more exposure to the world, the demands of the younger generation are changing. Health, safety, and financial security started becoming more important than ever to consumers during the COVID-19 era. This change is forcing all industries to innovate, and the shift is evident in the way that the life insurance industry is adapting to it. Let us look at some major ways in which the consumer behaviour towards insurance has evolved.

The rising awareness of health and life risks is increasing the demand for insurance protection. Regulatory changes by the Insurance Regulatory Development Authority of India have also helped. For instance, IRDAI’s regular interventions have meant that products in the market are transparent and customer-friendly with more benefits than the terms and conditions attached to them. The intervention has also ensured that new products are innovative in terms of their structures and payouts.

Value for Money is Paramount

These unforeseen times are making consumers think about the value of money more than ever before. They are increasingly becoming price sensitive. Consumers have started focusing on essentials and reduced discretionary spending.

This has created the demand for those insurance products which can deliver the true value of money they are spending. Young people are considering life insurance not simply for protection but to achieve their life goals. Ambitions such as entrepreneurship, world travel, preventive healthcare and having a parallel career demand financial planning by young people. More so, the young millennial and Gen Z seek hyper-personalization in their financial instrument which has led the Life insurance industry to adopt flexible policy terms, premium payment terms and give customers the benefit of choosing how and when they pay their premiums. Insurers need to increase the appeal of their products by adapting to changing customer experiences and expectations. Packaging additional services with core insurance products may increase value for consumers.

Early Financial Planning & Lifestyle Needs

There has been a shift in the way financial planning was done earlier. Nowadays, to maintain the standard of living and to achieve life goals, consumers are looking at planning for retirement early in their life. As a result, long term life insurance products are gaining traction.

There has also been a change in the consumer’s expectations from the insurance products. More demand can be seen for the products which match the lifestyles and needs of the consumers, Digital touchpoints, self-service apps and automated payment reminders. Increasingly, the product demand is also shifting towards online products which can be bought and redeemed online, have more transparency, easier buying journey and do not tangle the customers in complex processes.

The Digital Age

There has been an extensive increase in online transactions since the global spread of the virus. This has given the insurers an opportunity to build a strong online presence with a plethora of services that can benefit a policyholder.

The new way to reaching these new consumers is largely going to be phygital — physical and digital. This means that no matter how the customers are acquired- offline or online, there is a need for various touchpoints during the customer life cycle on both channels to attain customer satisfaction. Consumers now thrive for ease of use, quick payments and uploads while ensuring their safety. Digital services that the insurers are now seen to focus heavily are completely digitized application process, easy access to the details about policy and coverage, swift insurance premium payments, better comparison options and hassle-free claim settlement process. Insurance companies are also paying special attention towards implementing automation to the process for a seamless and quick customer experience.

The ongoing pandemic has accentuated the importance of life insurance among consumers. A considerable section of consumers is beginning to perceive insurance as an indispensable safeguard against unforeseen scenarios. Consumers have realized that life insurance products shouldn’t be evaluated by merely considering their benefits as a tax-saving instrument or as an investment product or both. Hence, the insurance industry is witnessing a positive shift in awareness about life insurance products and their benefits.

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of

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Vinit Kapahi

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