Insurance is one of the many sectors in India that have witnessed a revolution due to digital technology. The advent of innovative tools and software solutions is gradually making the process of buying insurance easier than before. For instance, you can now browse the internet to compare different policies and insurers, choose one, and even apply for a policy with a few clicks. In fact, you can just go online to file a claim as well. Hence, it might seem that the need to physically visit an insurance company or talk to an agent is waning with time. But is that indeed so? Will insurance agents stop being relevant in a digital landscape?
To get answers, first find out how the Indian insurance sector is growing, how consumer behaviour is evolving, and why agents need to keep up with technological advances and changing times.
So, what is happening in the Indian insurance sector?
The insurance sector in India is poised to grow at a CAGR of 5.3% per year from 2019-2023. Many factors attribute to this noticeable increase. The millennial population, for one, is showing a lot of interest in health insurance coverage. The demand has significantly surged with the rise in new-age diseases, COVID-19 being a prominent one among them. Naturally, insurance companies and their respective agents are tapping into this section to maximize revenues.
Now, the increase in the number of agents seems to have a direct correlation with the demand for insurance. And this number might increase further in the coming years. In fact, it might interest you to know that from 2018 to 2019, there was a 9% increase in the number of insurance agents operating in the Indian market. And there were over 27 lakhs active agents as of 31 March 2019, around 3 lakhs more than a year before.
The advent of insurance technology (Insurtech) is another primary driver of the growing demand. As mentioned before, quick comparison of policies, ease of buying, and faster processing of claims are a few developments that have happened in the insurance sector in the last few years. So, if you are wondering as to how relevant insurance agents are in this digital era, the answer is much more than just a simple Yes or No.
What do customers want?
When it comes to researching different insurance options, a modern-day customer usually heads to online portals. They use policy comparison websites and premium calculators to shortlist the best ones. But still, a lot of them prefer purchasing a policy from an agent. At least, many reports indicate that. For example, according to a 2019 survey by PwC, 55% of the participants preferred to purchase their policies from brokers and agents.
One of the reasons why agents are still relevant and will continue to be so is because insurance in India is mainly a push product. Target consumers often need an external party to persuade them to purchase a policy.
Plus, the terms and conditions can seem confusing to most potential buyers. They are often unable to decide on their own. Which is why, an agent can be that trustworthy someone who simplifies the complex terminology and procedures of the insurance world.
Do agents need to evolve? Yes, they do!
In an era where consumers prefer quick and seamless experiences, moving to digital space has become a necessity for insurance agents. It goes beyond creating a website or marketing through social media platforms.
To thrive in the digital age, agents need to leverage insurtech. This doesn’t mean they have to learn data analytics from scratch or acquire the latest digital skills. Instead, they can learn to strategically apply the tools already developed by insurance technology companies.
Predictive analytics can be especially helpful
Predictive analytics is a technology that insurance agents can apply to acquire and retain customers more efficiently. Using data insights will allow them to identify the customers that are likely to increase or reduce coverage. They can proactively offer special attention to them. Predictive analysis is already an integral part of top insurance players’ operations. So, it is high time that independent agents also leverage this technology while dealing with their customers. Many insurance tech solutions already serve agents by offering invaluable insights about consumer behaviour. The best part is that these solutions are easy on the pocket too.
The Bottom Line
Everything we have discussed above indicates that insurance agents can coexist with technological advancements and continue to be important in this digital era. All they need to do is stay aware of the latest digital tools and learn how to apply them strategically to understand dynamic consumer needs and meet them efficiently.