Five trends that will shape the life insurance industry in 2023

In the post-Covid world, the importance of having insurance –health or life –has gained a lot of prominence among the salaried as well as the non-salaried class. Insurance not only acts as a cushion against an unfortunate circumstance, it also has been a traditional tax saving instrument. The onslaught of the Covid pandemic has led to an upswing in people opting for insurance. A lot of movement is being observed in the health and general insurance space while the life insurance space is also evolving. 

Casparus J H Kromhout, MD & CEO, Shriram Life Insurance has spoken elaborately with Reema Sharma of Zee Media regarding Five trends that will shape the life insurance industry in 2023

1. The rise of Insurtech

A recent report released stated that insure-techs is the fasted growing segment in the FinTech- expected to grow to $339bn by 2025.

Driven by the Pandemic, the need and urgency to step up on digital solutions for customers and business has led to an increase in technology initiatives. Increased internet adoption has created an opportunity for insure-techs to facilitate the technology advancement and bridge gaps in present digital solutions, says Kromhout.

2. Personalised products

Numerous surveys conducted recently show increased customer awareness towards insurance. Also trends across other sectors like education, ecommerce, entertainment have evolved customers to better understand personal requirements and expect tailored solutions. 

Kromhout adds that with the availability of data analytics and the increase of customers on digital; the insurance sector would also need to move from a product to a solutions approach when designing offerings for customers. 

3. AI and automation to remain at the forefront of innovation

AI is helping transform processes and financial products driven by strong analytics.  Adoption of AI along with more efficient use of data will drive the innovation and advancements in customer offerings in the coming years, he said.

4. Expansion of digital channels

Digital has penetrated into the all segments of the society, even the ones that were earlier perceived to be distant from technology - like the older generations and the rural population. It is estimated that over 50% of India’s internet usage comes from the rural segments. 

To add to this the possibilities of what can be offered digitally in also increasing rapidly. Technologies like virtual reality, blockchain, etc. are accelerating the type of offerings from digital, in addition the advent of metaverse will open newer possibilities from digital. 

Thus, the combination of the increase in adoption of digital across all segments of society as well as the pace at which the possibilities of what can be offered is increasing; the options of future digital channels seem immense and provide an exciting space to work on. 

5. Underwriting transformation

Underwriting has already transformed to a more data-driven process. Predictive data analytics is currently being used for quick issuance of policies, weeding out fraudulent cases and understanding customer’s financial and medical health. Thus, underwriting efficiencies and risk assessment have improved. Use cases of providing pre-approved insurance, customised premium rates to customers based on digital and medical history are becoming popular in the life segment reducing policy issuance TATs and increasing ease of doing business, Kromhout told Zee Media.