Business Transformations expected in the Life Insurance Industry

The COVID-19 pandemic has nudged industries across the spectrum to adapt to contactless mode of life. Most business have found a way around the tangible problems and have successfully transitioned into the new normal. While prospective clients have also been steadily adapting to the new way of being, around 22 % of the users are still missing the physical interactions involved. Especially in business verticals like finance and insurance, clients are always looking to build a sense of trust and belonginess before purchasing any financial product. One may search the internet all they want for the best insurance plan; however, the final purchase decision is always made after seeking advice from that financially savvy family member or bank manager. Such trust is built over a long span of time and prospective clients, especially digital migrants still seek to establish this trust through physical assistance before purchasing any financial product. Thus, a mix of the online and offline needs to be established with customers purchasing insurance products and that is where phygital paves way. Phygital marketing has helped build trust with consumers and allowed customers to be feel secure, on many fronts when choosing a finance or insurance product.

The way insurance sales are done has drastically changed. The real future of insurance lies in leveraging the power of smart technology to streamline the sales process. Agents and brokers are typically the key players in the insurance distribution channel, with market shares of 42% and 25% respectively. The old school face-to-face distribution channel is very much alive and has been integrated with tech assisted models to ensure more leads and conversions. They mainly play a part in advising and managing complex insurance products. Hence, the insurance industry is edging towards a fully digitized assisted sales for the convenience of our customers.

From Product Based Pricing to Person based pricing: According to a study conducted by McKinsey, majority life insurance executives agree that product innovation is the key to unlock the full potential of the market. Understanding customers and what they need vis a vis the pricing they are willing to accept for any given segment of product is crucial data for any insurance company. To get there, insurers can take a leaf out of consumer companies’ page and adopt a more tactical and supple approach towards their products. IndiaLife Insurance has closely implemented these strategies and been a part of the customers’ financial journey by strategically aligning the companys’ vision, overall market trends and financial capabilities to come out with fresher product mixes.

What is Phygital?

Phygital marketing envisages both the online and offline communication eco systems by adopting impressive competencies from both and creating a well-rounded customer experience. Phygital marketing strategy takes the top components from the physical channels of insurance process like immersion and client interaction and coalesces it with the ongoing digital wave. As interpersonal interaction continues to be a critically valued element for customers while choosing an insurance product or service and phygital does the needful by knitting together the consumer need of hyper connectivity and changing needs of the new normal.

Typically, there are two types of digital customers – Digital migrants and Digital natives.

• Digital migrants are the ones who are now 35 years of age and above. They are now discovering the certainties of life and striving to do everything to keep their families financially secure and happy. Though they were not born in the digital age, they are happily progressing and engaging with the different banking and insurance services offered online. They are cautiously moving from paper to digital and are open to browsing and buying provided there is a degree of human interaction involved.
• Digital natives are the ones who were born and raised in the digital pandemonium. They have an affinity towards different technologies in play and perceive it to be an important part of their everyday life. They are used to entering and closing transactions in the digital space as they understand pros and cons of it and decide the trustworthiness of products and services based on their instincts.

While it might seem abstract, a lot of times the digital migrants surpass the tech savviness of digital natures due to sheer sense of adaptability and captivity. In other cases, phygital marketing can play a predominant role in helping digital migrants get rid of their inhibitions and lean into a wholesome experience. The thought process behind phygital consumer experience is quite clear: while we’re becoming increasingly reliant on digital technology, we simultaneously crave physical experiences. Just like hardback books have not become obsolete by e-books, physical interactive experience cannot be completely replaced by digital customer experience.

The idea is to juice out maximum consumer value from both modes to create the ideal experience mix for the digital migrant consumer.

In the two step phygital process, to connect with the digital migrant consumers on a digital level in the first phase, a tailor-made process has to be followed. For instance, IndiaFirst Life Insurance got in-touch with their customers through our e-Sampark and Ghar Baithe Insurance initiatives. The Ghar Baithe initiative gives consumers an opportunity to have a face to face interaction with them via a video call and take them through the entire journey in a personalized manner. This puts them at ease and helps establish a sense of trust. Further, consumers can get all the necessary information via our Direct and Digital call centres or login to the Multi-Lingual website. The Self-Service portal also aids them in taking the further necessary steps. Though the process is digitized, by going phygital, consumers get an individualized experience and gives them the required nudge to helping us make their future secure.

Bottom line:

As marketeers, an important aspect of our vocation is to understand the customer requirements thoroughly and deliver as per the changing market needs. The market has changed multifold during Covid-19 with the finance and insurance industry seeing dynamic changes in the way they approach their business. Customers looking to buy financial products are persistently looking for connected experiences where the physical and digital channels can coexist in the same journey. It is integral to provide the customer a wholesome experience and adopting phygital strategy has done just that. In the coming times, phygital communication is expected to play an even larger role in enhancing consumer experience for financial and insurance- based industries while weaving together the entire experience in an amicable way