Expertspeak: Insurers have to simplify

EVERY INDIVIDUAL looks for a financial savings instrument to build a savings pool with two requirements — security for hardearned money and returns. Life insurance offers both, protection and longterm savings.

Financial savings are on a comeback trail. Potential investors are looking at avenues for channelising their savings. We need to make sure that life insurance is the preferred instrument for long-term investors by offering them simple products.

We believe that the key innovation in the life insurance industry will be the simplification of products, processes and terminology. The customers’ requirement is simple, all they want to know is, the expected returns. Similarly, nothing stops us from making products with low exit barriers. The regulator’s emphasis, too, has been on the need to simplify products.

A product which is simple and can be understood by the man on the street, is what we all should aim for. The future of life insurance lies in simplification of products and processes. This will be the key to increasing the penetration of life insurance as a percentage of the country’s GDP.

The benefit that Ulips offer is that they allow customers to switch between equity and debt without any tax implications. If the companies offer smooth and efficient on-boarding they will be more attractive vis-à-vis competing savings products as life insurance provides life cover equivalent to ten times the annual premium.

Technology has the power to disrupt and challenge existing norms of the business. The multi-channel architecture to provide convenience to customers is one of them. Currently, a few life insurers offer a digital platform which has virtually eliminated the need for multiple client visits and paperwork. The digital platform has been extended to and enables customers to directly purchase products of their choice. The typical agent has transformed into a tech savvy distributor with a tablet, conducting a need analysis and advising customers on the products suited to their needs.

The trend in coming years will be complete digitisation of the sales process, which will make it possible to purchase life insurance products in a few minutes from any corner of the country. With the younger generation being more technology savvy, the digital platform is bound to gain traction. This will necessitate focus on manufacturing products that are suited to this channel. After term policies, single premium products will be the next category to taste success on the online platform. We believe life insurance has not yet realised its full potential. It is a powerful financial services licence in India, given the range of products the industry can offer. Once the simplification code is cracked, the sky is the limit.