Wednesday, November 23, 2022
HomeBusinessReasons Why The Phygital Insurance Model Is Growing Popular In India

Reasons Why The Phygital Insurance Model Is Growing Popular In India

While digital was the beginning to the transformation of the Indian insurance sector, there was a quick realization that human intervention into insurance is equally important for increasing insurance awareness and penetration.

Insurance in India has been majorly driven by the traditional insurance model. Due to the traditional, branch led insurance model, insurance penetration over the years, has been majorly concentrated in the top 50-60 cities. The semi-urban, rural and smaller cities have remained underserved mainly because of the lack of proper insurance distribution.

The last five years has witnessed a gradual shift towards digital insurance in the country. Insurance companies, insurance aggregators, distributors have been joining the digital bandwagon to increase insurance distribution and consumer outreach. Coupled with Government’s ‘Digital India’ mandate; companies harnessed the digital arm to reform the way insurance is bought, sold and serviced in the country. The biggest boost was the Covid pandemic, which transformed the significance of digital insurance. The only positive aspect of Covid was consumer realization towards insurance and more importantly towards digital and contactless insurance. While digital was the beginning to the transformation of the Indian insurance sector, there was a quick realization that human intervention into insurance is equally important for increasing insurance awareness and penetration.

Thus, many companies adopted the phygital model, which is driven by contactless human interface (usually the insurance advisors), enabled through a digital platform. Phygital witnessed more success in terms of consumer outreach, connect and engagement, across all insurance categories. It helped insurance companies increase outreach to the smaller cities without insurance branches or offices. Here are some reasons to believe that phygital will be the key driving force for growth of insurance in the years to come.

Built of trust and credibility: Phygital model is driven by insurance advisors who reach out to consumers through the help of digital tools. This structured approach has helped insurance companies reach out to consumers compassionately, in the new frontier of contactless. While digital removes the challenges of insurance demand supply gap by removing the need for an insurance branch, it also bring in transparency, choice and best price through a simplified process; at the same time, digital human intervention helps consumers avail the right insurance products, support during the entire insurance evaluation & buying cycle, as well as ensuring quick and transparent claim settlements. This has invariably helped in building the much-needed consumer trust and relationship which a pure digital model may not be able to provide.

Insurance is contactless yet interactive- While digital has helped in making insurance contactless, phygital has been the key in personalizing consumer experience, making it interactive. Consumers today are looking at instant inputs to their insurance queries, unlike writing letters to insurance companies in the past. Insurance companies are organizing instant calls, chat facilities to help consumers solve their queries. Insurance companies have also integrated video interactions, virtual platforms, video marketing, voice assistance to make the entire insurance process interactive. Phygital has been successful in building virtual touch points for consumer service, giving consumers the assurance and reassurance of trusted insurance service.

Phygital is the innovative alternative to traditional insurance– Phygital model of insurance replicates what a traditional insurance branch offers. Phygital is providing the entire human experience of end-to-end insurance process in a digital crust. Consumers receive constant alerts and reminders in case of policy up gradations or renewals, notifications in case of any new announcement or ending of policy. While face to face insurance model involved lengthy processes, digitization helped in completing the same processes in half the time, that too from the comfort of the consumer’s home. Consumers today also have the luxury of choosing insurance, from a host of options provided by different insurance companies- thanks to phygital.

The growing millennial audience: Changing consumer behavior is also a key to the success of the phygital insurance model. Millennials which comprise of close to 35% of India’s population are tech-savvy and look for instant solutions. Whether it is the urban India or semi-rural or even rural India, millennials are getting acquainted with digital today. With the fast-paced inclusion of smart phones and cost-effective internet, India is estimated to have 900 million internet users by 2025. The majority of these 900 million users will be the millennials, who will become the key drivers of phygital insurance in the years to come.

InsurTech companies have harnessed the digital-led insurance advisor model for providing the quickest, hassle-free, instant insurance solutions. It is because of the boom in multiple innovative InsurTech models, that insurance has started reaching smaller towns and cities in the country. With this, consumers are receiving instant policies, without unnecessary paperwork or need for face-to-face meetings. Insurance companies are either adopting digital and/ or phygital or joining hands with InsurTech companies to leverage their consumer-friendly process and the ability to reach every nook and corner of the country.

Source: Business World

RELATED ARTICLES
- Advertisment -

Most Popular

Recent Comments