From young consumers becoming dominant buyers to the rise of InsurTech, marketers have noticed several trends emerging in this categoryThe listing of LIC or Life Insurance Corporation has put the insurance business in the spotlight. But are millennials looking in this direction?
Finally, the general opinion is that the insurance category is for middle age. The youth would rather opt for an immediate return on their investment, similar to the instant gratification they seek in other categories, from pasta to music, among others. And the insurance business is as slow as it gets, especially in generating returns on investments.
This is where a majority of the insurance marketers that ETBrandEquity spoke to take a different view. In her opinion, young people are increasingly choosing this category to park their savings for shorter-term returns such as education or long-term plans such as retirement.
Looking at the industry, LIC still dominates the segment with a market share of over 60 percent – although many insist its influence is steadily waning as the public sector giant steadily loses market share to private players.
There are currently 24 life insurance companies in India with Life Insurance Corporation being the only public player. The size of the Indian life insurance industry on a total premium basis was ₹6.2 trillion in FY2021 compared to ₹5.7 trillion in FY2020. The total premium of the industry has grown at a CAGR of 11 percent in the five years to FY2021. CRISIL, commissioned by LIC to conduct a study of the sector, forecasts that the industry’s total premium will grow at a CAGR of 14-15 percent over the next five years, reaching nearly $12.4 trillion by fiscal 2026.
But not only the size of this segment is changing rapidly. Consumer demands and expectations are not much behind it.
Accenture highlighted in its 2021 report, Insurance Customers’ Guide to Safety and Wellbeing, that millennials and younger consumers (aged 18-34) are showing greater interest in digital offerings that help them live safer, healthier and more sustainable lives To make decisions.
So did the Insurance CuES India report, which showed that millennials in particular are looking to insurance companies rather than staying passive.
Do young savages skip the gun?
As the younger consumer base slowly becomes the dominant buyers, insurance marketers find themselves amid new trends and the resulting need to find ways to maintain that base.
Chandramohan Mehra, Chief Marketing Officer of Bajaj Allianz, emphasized that according to her consumer research, the younger audience prefers life insurance products more than any other investment option to achieve their long-term life goals, such as saving for retirement and raising children.
Tapping into conversations that fulfill both wealth building and wealth protection is an important factor for Niva Bupa. Nimish Agrawal, head of marketing at Niva Bupa Health Insurance, shares that flashy conversations about tax awareness are doing the job. “A lot of people are probably in their first job or their second job. So the monthly income they have, the monthly expenses they have and the net savings at the end of the month play on in their minds.”
In such a scenario, says Agrawal, tax deductions or tax benefits become a very tangible way to show the consumer that not only are they protecting their health and wealth, but they are also getting a tangible deduction depending on their pay grade.
InsurTech – The way forward
When it comes to young consumers, one cannot help but ignore the digital addiction that this consumer base brings. Insurtech has joined martech, adtech and fintech in modern times.
Insurance CuES India report highlighted that one in two consumers has relied on digital information sources before purchasing life insurance in the last year.
A space that has largely been dominated by physical interactions over the years and now seeing nearly 50 percent of its consumers prefer another mode is making marketers think again.
Ashish Tiwari, Future Generali’s Chief Marketing and Digital Officer, points out that customers are consuming more content online.
He draws a parallel between other categories and the insurance category, where a major digital influencer can influence a segment of consumers when it comes to categories other than insurance.
“You really don’t have a digital influencer like that in life insurance, and any industry where you don’t have something like that means customers are looking at different touchpoints to understand what they’re taking,” notes Tiwari.
The AI-powered world has enabled companies to trick bots into doing many things for them. Many of them have resorted to chatbots to answer customer queries. The insurance industry has also built on this.
Mehra shares that during the post-sales journey, the insurance consumer has largely transitioned to policy self-service on digital media. This includes customer portals, apps, WhatsApp and chatbots.
However, that doesn’t mean physical interactions are off the charts.
The Accenture report states that nearly half (49 percent) say they have a lot of trust in a human advisor in an office when making an insurance claim, while only 12 percent do the same via the automated service via phone/web/e-mail. say mail. and only 7 percent say the same about a chatbot.
Tiwari adds here that most digital players also have heavily invested call centers for a human-centric touchpoint where they can actually talk to someone.
Everything is not hunky dory
The trends may be there, but the challenges insurance brands face are in sales. The challenge of protecting the brand from bad word-of-mouth propaganda through mis-selling tops the list of concerns.
While Agrawal brings in the tech-based options to limit the challenge, Tiwari emphasizes the age-old adage, too good to be true. “If something looks too good to be true, there’s a very high probability that it isn’t,” he says.
Other challenges that arise in this space force marketers to think outside the box. For example, let’s take the case where a family who has undergone Covid treatment, regardless of their age, submits the same medical report.
In such cases, Agrawal emphasizes that the use of digital analysis tools and big data comes in handy to train the algorithm and recognize such patterns.
Consumer reach becomes another key way out when it comes to tackling challenges in this space. Communicating about brand campaigns going to consumers plays a role in creating the awareness that needs to be conveyed.
From a relatively under-spoken category to a game changer for the young consumer base, the insurance category appears to be on its way to becoming the talk of the table in every household.
However, this is not a product that can be continually tweaked according to consumer demands. How marketers stay connected with their consumers with the promised deals well beyond this phase will likely decide the fate of the sector in the years to come.
The index for India confirms the “positive outlook” of Indian consumers, with 77 percent expecting positive changes in the financial situation over the next year. This is better than their global counterparts, which are at 48 percent, the report said. In India, this affects the low-income group the most (72 percent), followed by the high-income group at 60 percent and the middle-income group at 58 percent, it said.