scorecardresearchInsurance Awareness Day: Hyper customization is the buzzword in the market

Insurance Awareness Day: Hyper customization is the buzzword in the market now, says Nitin Mehta of Bharti AXA Life

Updated: 28 Jun 2023, 09:13 AM IST
TL;DR.

In an interview with MintGenie, Mehta said that the amount of insurance coverage that people need could vary depending on their individual circumstances.

Nitin Mehta, Chief Customer Officer & Head – Marketing, Digital & Online Sales, Bharti AXA Life Insurance

Nitin Mehta, Chief Customer Officer & Head – Marketing, Digital & Online Sales, Bharti AXA Life Insurance

The customer should be given the top priority, and this must reflect in an insurance company’s core values, says Nitin Mehta, Chief Customer Officer & Head – Marketing, Digital & Online Sales, Bharti AXA Life Insurance.

In an interview with MintGenie, Mehta said that distributors are the brand ambassadors of insurance and it is their responsibility to spread awareness about insurance.

Edited Excerpts:

Q. Lack of awareness is a big issue that refrains more people from seeking the necessary insurance coverage. How do you think people can be educated about the importance of insurance?

Addressing the lack of awareness surrounding life insurance requires a multifaceted approach. Here are some ways to educate people about the importance of life insurance:

Leveraging social media – With the increased internet penetration and social media, leveraging it to drive the agenda of educating people on their regional language through content in the forms of short videos, easy-to-read articles and infographics, and other forms of hyper-focused multimedia content will help promote the insurance awareness across the social strata. The key here is to make it hyper-personalized, no assistance needed content, in terms of language, ease of readability, and accessibility.

Running awareness campaigns – As an industry, it is imperative that we take it upon ourselves to advocate the importance of life insurance as well as what it offers. This endeavour at an industry level is the only way of driving a large-scale re-invention of the industry. This is ably supported by the regulator’s continuous drive to increase insurance awareness through targeted campaigns and missions. We as an industry stand at a cross-section to take this tool given to us by the regulators to ensure the agenda of ‘Insurance for all by 2047’.

Leveraging distribution – Distributors are the brand ambassadors of insurance and it is their responsibility to spread awareness about insurance. While the focus has always been on the idea of selling and pushing a product to the customer, the time has come now to change the ways and re-engineer the sales process. It has to start with the distributor taking the onus to explain in an easy-to-understand language to the customer what the product offers, whether it makes economic sense given the customers’ needs, and drive the agenda of educating the customer. Hyper customization is the buzzword in the market now, and this can only be achieved if the benefit of the product takes precedence over the outcome-based approach of selling any life insurance product.

Q. The inability to gauge the importance of insurance is evident from the inadequate insurance coverage that many people seek. What's the best way to decide on the coverage?

The amount of insurance coverage that people need will vary depending on their individual circumstances. However, there are some guidelines that people can follow:

Consider their financial goals: It is important to maintain a financial security blanket for the family in case of an unfortunate event. The family should be able to maintain their current standard of living. Hence it is important to assess the financial goals and estimate the life insurance coverage that will be required to meet these goals.

Estimate their financial liabilities: Do people have any debts that they need to pay off? Do they have any dependents who rely on their income? The amount generated from life insurance coverage acts as a resource to take care of these financial liabilities in case of an unfortunate event.

Consider their risk tolerance: It is important to know the risk-taking appetite of the people. A suggested approach can be to take into consideration factors like present annual income, financial liability, financial goals, age, and the period for which one needs coverage. Ideally, 12X of one`s annual income is a good sum assured one can ask for and pay premiums for to ensure the lives of the dependents are safeguarded.

Q. While investing in any kind of insurance, what is the most important factor that one must be aware of?

The first and foremost step of buying any insurance is to understand what they need out of it – Do you want to leave a safety net for your dependents? Do you have a short/medium/long-term goal, for which you’re saving? Do you want income benefits post-retirement? It is imperative that one has a clear understanding of their needs and subsequently the product they’ll need for the said need. After understanding their need, there are a few key factors that people should consider when investing in insurance:

Type of insurance: There are many different types of insurance plans so people need to choose the right type of plan that suits their needs.

Policy benefits: It is crucial to understand the policy. People need to read the benefits and features carefully to understand what is covered by the policy and what is not. This can help people to be better aligned with their goals when purchasing a life insurance policy.

Premium: Insurance premiums can vary depending on the type of policy and the person's age and health. Staying invested is important for a secure future. It is better to invest in a life insurance policy at an early age to avail the benefit of lower premiums.

Q. What are the steps that you suggest should be taken to build customer trust by insurance firms?

The customer should be given the top priority, and this must reflect in an insurance company’s core values. As rightly said, “The customer is not an outsider in our business. He is a part of it”. Therefore, any firm should adopt a customer-centric approach and also be transparent with their dealing.

Transparent communication – We as an industry must focus on providing comprehensive information to the customers in their preferred mode and language of communication to make sure they understand what they are purchasing.

Simplify policy language – Insurance is considered to be complex to understand hence our purpose statement ‘In a complicated world, we make insurance simple’. The insurance firm should focus on simplifying insurance with the help of various campaigns like ‘demystifying insurance’, myth-buster, etc, to clear out the jargon-filled policy terms and conditions.

Exceptional customer service – Companies should focus on hassle-free convenient processes for customer experience. Employees and staff at call centers, and branches should be adept at servicing customers. Technology also plays an important role - WhatsApp Service and Online Portal let customer solve their queries anytime and anywhere. This saves the time and effort to visit the branch to avail of the service.

Proactive education and guidance – Education on topics like how to prevent cyber fraud and not fall prey to fraudsters is important to make sure customers are protected from insurance scams.

Social responsibility – During difficult times like the recent Orissa train tragedy, etc., or natural disaster the support offered makes a difference.

Claim settlement – Dedicated claim handler and hassle-free process for claim settlement is an important aspect for life insurance companies to gain trust.

Q. Insurance awareness has gone up a bit since mid-Covid. Do you feel that this trend will continue?

Yes, it will. The global coronavirus pandemic has highlighted the severity and uncertainty of challenging times and situations. Consequently, securing oneself and their family financially has become crucial. As a result, there has been increased recognition of the importance of life insurance among individuals who aim to safeguard their families during grave and uncertain circumstances. Additionally, initiatives by the Government of India to promote and educate people about insurance have contributed to raising awareness in the country. Considering these factors, it is likely that the trend of increased insurance penetration will continue.

Q. More people from tier-2 and tier-3 cities are now showing an interest in insurance products. Do you think it hints at successful insurance penetration among the large uninsured population in India?

Yes, the increasing interest in life insurance from tier-2 and tier-3 cities hints at successful insurance penetration among the large uninsured population in India. The internet has made it easier for people in these cities to access information about life insurance, and the government's efforts to promote insurance are also having an impact.

As more people in these cities become aware of the benefits of insurance, we will see a further increase in insurance penetration in India.

 

Article
Trends in insurance sector
First Published: 28 Jun 2023, 09:13 AM IST