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Overview
To understand and explore how the ecosystem of customers in the insurance industry is evolving, in 2019, PwC conducted a survey and discussion with around 200 respondents from stakeholder groups in the Insurance industry in India - customers, agents and insurers. Further, we gathered the perspectives of all stakeholders on how the industry is working towards meeting customer expectations and how emerging technologies can help in bridging the gap.
Across industries, the focus is shifting from a product-driven approach to customer-driven strategies, and the insurance industry is no exception. With technology advancements and their growing adoption, every user segment is now becoming more aware and demanding and they are benchmarking service delivery against not only other segments the of financial services industry but also across other industries such as retail, travel and entertainment.
New technology gives rise to new capabilities and processes should be redesigned accordingly to reduce wastage and delight customers. Merely adopting technology and automating processes will not eliminate inefficiencies. A change in approach is needed whereby technology is viewed as a fundamental business tool rather than an operational and process tool. The natural inhibition in a regulated industry can be dispensed with if organisations work with all stakeholders, including regulators and the Government. In this context, the healthy interest regulators are showing in sandboxes bodes well for the industry.
The modern insurance customer prefers simple, customised and intuitive policies, an easy process and a simple and tangible cost breakup. Insurance providers have begun to appreciate this preference and have put the customer at the centre of product design, eliminating all poor experiences along the ‘moments of truth’ in his/ her insurance adoption journey. This shift in product design from product to human-centric design is a fundamental shift in the Indian insurance industry.
Key findings
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Preferred mode of insurance purchase and reasons
In the Indian landscape, insurance is still a push business and is considered as a complex product for which customers rely on face-to-face interaction for better understanding of the product’s features and pricing. This is apparent from the survey responses, where around 55% of customers still prefer to buy insurance products from agents/brokers and the conversion rate from the online mode is just around 4%.
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Challenges faced by customers during the purchase stage
Customers find it difficult to understand policy terms and features while purchasing an insurance policy. Policy terms are complex and lengthy, which makes them difficult to comprehend. Some customers pointed out basic customer engagement related challenges like pushing irrelevant products and lack of trust.
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Challenges faced by customers during the service/claim stage
At the service and claim stages, out of all the challenges faced by customers, 47% are relationship-related issues as interactions and processes are not easy to deal with. Also, paperwork makes the process lengthy and complex. Further, 35% of the challenges are related to responsiveness during claim processing.
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Challenges faced by customers during the closure stage
At this stage, customers deal with multiple representatives and have to explain the reasons for their action each time. This is a major inconvenience for customers. Approximately 45% of the challenges are of this type at the policy closure stage. Issues related to inadequately defined processes for closure come next, with customers finding processes lengthy and cumbersome due to the involvement of manual paperwork. Approximately 18% of the issues are related to lack of transparency in charges imposed during closure.
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