Insurance Sector in India
Introduction
Insurance has always been a classic example of negative demand: people know that they should have it, and yet they delay getting one, until they realise that they needed it after all. But even if insurance is probably the last item on one’s shopping list, insurance companies are still making millions off their products. So, what is it that makes customers so evasive when it comes to insurance? And how can insurance companies grow even further?
To understand this, we need to take a look at the insurance industry of India, which consists of 57 insurance companies, of which 24 are in the life insurance business and 33 are general insurers, with only one public sector company. Apart from that, there are national re-insurers, agents (individual and corporate), brokers, surveyors, and third-party administrators servicing health insurance claims.
Business Situation
- Client wished to conduct a customer satisfaction study across 14 cities (tier 1 & 2) in India to identify their customer needs from on-boarding to making claims.
- Evaluate service level experience from client and take their feedback
Finding Facts
- Customer experience of purchase of policy
- Customer journey from on-boarding till claims
- Total hand holding process by the company executives
- Information finding process for customers
Solutions Suggested
- Offer suggestions based on sample segments
- Offer 360-degree overview to client about customer journey and satisfaction points
- Explaining the un-satisfied areas in customer journey with the brand
Outcome
- Improvements in customer handling processes
- Feedback on customer un-met needs
Our Understanding & Suggestions
Despite there being so many options available, insurance isn’t exactly the most popular thing. This is mainly because consumers have an optimism bias, meaning they tend to believe that nothing bad will happen to them. Such consumers may not have experienced tragic events or misfortunes in their family or friend circles. This leads them to believe that the sum they pay towards a specific type of insurance is not worth it, given the eventuality of the occurrence of such negative events. Due to this reason, many people in India and around the world tend to avoid insurance policies. Another factor is low personal income, where individuals are barely left with anything for basic needs such as food, clothing and shelter, let alone buying an insurance policy, since it is still not perceived as a necessity, especially in India.
Yet, even after facing all these challenges, insurance companies have been growing quite well in India. This can be attributed to the increasing number of people from the middle and upper classes that are buying luxury goods like personal vehicles which need to be insured by law. Other factors include general awareness, like health insurance policies gaining popularity due people becoming more wary of the rising health risks. Similarly, life insurance is also becoming more popular due to increasing affordability. Although, for any type of insurance, it is very important that the consumers feel a natural need, which can be achieved by educating the masses about reality. Affordability, flexible payment options, practical coverage (of events) and customer-friendly terms and conditions are factors which may convince the customer that a certain policy is a good bargain.
All in all, we can say that India is a growing market for insurance and has some way to go in terms of consumer trust, and proper need assessment can help identify the best policy for a certain class of consumers. This will help insurance companies grow a bigger client base and end up in a win-win situation.
