Demystifying Rural Insurance with Digital Technology

By Manoj Jain, Managing Director, Shriram Life Insurance

Over last few years India saw a growing boom in online e-commerce and almost every enterprise has setup their digital footprint offering their products and services online, available at a click of a button. In financial services, Banks have come a long way in offering their service on mobile technology and internet banking making the customer’s need to visit the branch a rare occasion. Life Insurance Companies have followed these cues and almost levelled up their online services for Urban consumption with experience led products, cutting edge social media marketing, online gamification and various other tooling targeting Gen X and Millennial customers. Adding to growing demand in personalized products and high expectations of the tech-savvy customers it’s hard to say whether Insurers have fully conquered the market but definitely a long journey awaits to innovate and keep pace with the ever changing market.

Over last few years India saw a growing boom in online e-commerce and almost every enterprise has setup their digital footprint offering their products and services online, available at a click of a button. In financial services, Banks have come a long way in offering their service on mobile technology and internet banking making the customer’s need to visit the branch a rare occasion. Life Insurance Companies have followed these cues and almost levelled up their online services for Urban consumption with experience led products, cutting edge social media marketing, online gamification and various other tooling targeting Gen X and Millennial customers. Adding to growing demand in personalized products and high expectations of the tech-savvy customers it’s hard to say whether Insurers have fully conquered the market but definitely a long journey awaits to innovate and keep pace with the ever changing market.

Whereas with rural customers, the challenge still remains on how to bring insurance to the doorsteps of hundreds of millions of people having limited awareness and/or access to insurance and financial services. India is a growing economy and Life Insurance penetration stands at 3.6% versus a global average of 6.2%. While majority of the population are grossly ‘un-insured’ or ‘under -insured’ in terms of insurance penetration and density, it throws an opportunity as-well-as a challenge for the Insurers to educate and bring Life Insurance services to the masses.

Breaking the myths of Rural Insurance with Digital Technology
There are lots of action in Rural India by the Government in making the rural population financially included. In 2015, Government introduced Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) to bring more people under the insurance cover. Many new technology initiatives like ‘Aadhaar’ by UIDAI for E-KYC and mobile-based payment platforms for financial products and services easily accessible to the rural population. Insurance Companies have joined hands in this enabling avenue that would make rural population ‘insurance inclusive’.

Until recently, penetration of the insurance industry in rural regions has been relatively lower. Primarily because the rural population did not have adequate access to information and awareness of insurance products. We understand that in order to make them aware of the insurance products and more importantly the need for insurance, it is necessary to educate them in person thus requiring a high touch service model in practice. We must utilize the “influencer model” where education of insurance needs and product awareness happens from the heart of these rural areas. Insurance companies should engage with the influencer entities like Head Master of the Grameen School, Gram Panchayat Head and Self Help Groups in rural districts to create awareness and value of insurance among every individual.

Engaging Insurance technology plays a vital role in educating the rural population on the need to be insured and finally converting them in a cost effective manner. Also the rural distribution channel including the agency network should be capable of selling and servicing the customers in a simplified process. As per recent surveys, an average rural household has more than one mobile phone and some are having smart phones. The awareness of mobile technology and its benefits are no longer a myth for the rural population. It is equally important to empower the Distribution/Agency network with tablet based Insurance selling solutions. With this the Agent can directly reach the rural customer and engage with him in availing Insurance products.

We understand that simplified products that are attuned to the basic needs of the rural customer plays a very vital role in the decision making process. Now leveraging Digital technology, it is possible to provide over-the-counter products that can be originated digitally in paperless process using handheld tablet devices. This takes away the burden of complex paper work and lengthy processing time where KYC authentication, Policy processing becomes faster & instant. Insurance Policy purchasing becomes a breeze.

Overall the Life insurance industry needs to address the challenge of being cost-effectively agile as well as keep reinventing itself to a whole new generation of customers across urban & rural. In a country which is as diverse in culture and economic ergonomics, insurers need to embrace the Digital empowerment to enhance the traditional models of consultative selling. Going forward digitally empowered agency channels will continue to dominate the channel mix of today, We should be prepared to technologically innovate, identify digital models to support and sell need based products & services for our customers of tomorrow.

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