55% of Indian customers continue to prefer agents and brokers while buying Insurance: PwC-CII report

• 39% of Indian customers prefer digital modes of communication on their existing policy
• Transaction security, technology compatibility, data privacy and 24-hour availability are mere ‘hygiene’ factors for today’s customers
• Despite the explosion of smartphones in the country, insurance adoption through apps yet to pick steam

Friday, 7 June 2019 – Insurance in India continues to largely be a ‘push product’ and is considered as a complex product for which customers still rely on face-to-face interactions for better understanding of the product’s features and pricing. This, amongst many others form part of the PwC-CII report titled “Competing in a new age of insurance: How India is adopting emerging technologies”.

As per PwC India’s Insurance Technology Adoption Survey 2019, 55% of the respondents mentioned that they continue to prefer buying insurance from agents and brokers. Moreover, the conversion rate from online modes stands at a mere 4%. Despite the continued preference for agents and brokers, the findings do reveal that emerging technology (such as chatbots) has already started picking up as the customer’s first point of contact. Also, 67% of customers prefer to leverage aggregators/online platforms which enable them to make calculated and informed decisions by comparing products.

Discussing the report, Joydeep K Roy, Partner & Leader, Insurance & Allied Businesses, PwC India, says, “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.”

Expressing hope for the future, Abhijit Majumdar, Partner and Technology Strategy Leader, PwC India, says, “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.”

The PwC survey also highlights the challenges faced by the customer at various stages of the insurance life-cycle:

1. Purchase stage: 57% of respondents said that there was a lack of understanding with respect to policy terms and features while purchasing an insurance policy. Policy terms are complex and lengthy, which makes them difficult to comprehend. Additionally, 23% of respondents also felt that there was a challenge with customer engagement where irrelevant products were pushed to customers and there was an overall lack of trust.
2. 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.
3. 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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About the PwC Insurance Technology Adoption Survey 2019:

PwC conducted a survey in 2019 to understand and explore how the ecosystem of customers in the Indian insurance industry is evolving. The survey had 200 respondents spanning customers, agents and insurers in India. The perspectives of all these stakeholder groups have been analysed to provide insights on how the Insurance industry is working towards meeting customer expectations and how emerging technologies can help in bridging the gap. Find out more at https://www.pwc.in/consulting/financial-services/digital-insurance.html

About PwC India:

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