Outlook 2022: Emerging Trends in Life Insurance, Growth Analysis and Expectations for the Year 2023

Importance/Awareness of Life Insurance after COVID-19: The Kovid epidemic has seen a lot of impact on our life and our attitude towards the future. Due to the epidemic, more than 5.3 lakh people died in India. In this way, the pandemic affected the general perception of people regarding financial stability and financial immunity. In a post-pandemic survey, more than 50 per cent respondents now believe in creating an emergency fund, while around 80 per cent say insurance is important for financial planning. People’s interest in term life cover policy increased immediately and there was an increase in the number of people comparing term products on the internet.

The effect of this change in attitude and increasing interest of people has been that insurance penetration in India increased to 3.2 per cent in 2020-21, which was 2.8 per cent in 2019-20, according to the regulator’s annual report.

• Customer Expectations and Behavior in Rural India

1. The need for trust and awareness among the rural population
2. Emerging Life Insurance Market in Rural Areas

Generally Indians keep insurance for an amount of 3.5-4 times of their annual income whereas people are advised to take insurance of an amount equal to 10-25 times of their annual income. Life insurance penetration has increased but we find that it is mainly seen in urban India and even today most of the rural population does not have adequate insurance cover. In a country like India where around 65 per cent of the population lives in rural areas, it is believed that this leads to a life insurance protection gap of up to 80 per cent. This figure shows the need to increase awareness and penetration in this segment.

However, adoption of technology has provided an essential means of reaching such customers even in rural areas. According to an estimate, 50 percent of the population using the Internet in India comes from rural India. Due to this, there is a lot of potential to reach the customers of these areas through digital and provide them service.

The needs and challenges of rural India are different like the ticket size should be smaller here. Apart from this, there are challenges of their own like uncertainty in season and income and providing service to people in rural areas.

The focus needs to be on providing solutions to these customers rather than just distributing insurance products. Shriram Life’s focus has been on the rural and urban population. About 44 per cent of the company’s business comes from rural India. The company has been looking for solutions and processes over the years to meet the needs of its customers.

• Using AI for Customer Engagement

1. Emerging Digital Trends for Life Insurance in 2022 and beyond

2. Increase in customer transactions through digital means

Due to the epidemic, more people are adopting digital and people have increased confidence in transactions through digital platforms. According to some reports, 69 crore people use the Internet in India and according to an estimate, 39 crore people do some kind of online transaction.

In the beginning of the pandemic, insurance companies paid a lot of attention to technology to provide facilities to their sales team and customer service team. It has seen an increase with time as there are many digital platforms available like website, mobile app and WhatsApp. eKYC and digital payments have made the entire sales process a lot easier.

AI has helped in developing processes and financial products that run on robust analytics. They provide better monitoring, control and flexibility as well as better understanding of the results. Advances in Natural Language Processing (NLP) and speech recognition technology have helped in the development of voice bots, which are soon going to become an integral part of BFSI customer service strategy.

It is believed that AI and predictive analysis will remain in trend in the coming years as well. Apart from this, insurance companies will look towards strengthening processes like claim settlement and underwriting with the help of technology. At Shriram Life, we are able to settle non-early death claims in remote rural areas within 12 hours. The focus will remain on improving TATs and developing robust processes throughout the customer journey.

• Product Development

1. Customers want better customization and target-designed products

With the change in insurance landscape and adoption of technology, the expectations of customers from insurance products have completely changed. While traditional products will continue to be relevant, there has been a huge increase in demand and focus on solutions based on customer needs. Insurance companies are looking for new categories of customers and there is a growing need to innovate and customize products for these segments. Growing interest in insurance amongst the youth has also led to a change in product development as young people seek more value while buying insurance products.

• IRDA’s outlook on recent developments

The regulator has taken some proactive steps to accelerate the growth of the industry. Several regulatory requirements have been simplified while guidelines have been relaxed to enable capital appreciation, among other things. Recent moves such as expansion of distribution tie-ups for corporate agents will allow insurance companies to offer more products, thereby providing more choice to customers.

, year 2023 expectations from

There is a lot of potential for the growth of insurance in India. The sector is constantly innovating and adopting technology to reach new markets and the outlook for the coming years is very positive. The industry has picked up a good pace post the pandemic and we are expecting the growth trend to continue. Although some macroeconomic factors have impacted the recent growth and cannot be ignored, the overall outlook for the industry looks positive.

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