It has been seen historically that disruptions in daily experiences, which can bring about long-lasting behavioural change, are rare. In ordinary times, consumers prefer holding on to old habits, with a very slow adoption of new methods that require them to change the way they have been traditionally thinking or interacting. It especially holds true for the financial services sector, mostly life insurance, which has typically been a traditional product.
However, the pandemic caused customers to change their behaviour – rapidly and in large numbers. Customers were forced to adopt newer ways of doing everyday activities, from grocery shopping to office work to online education for kids and even financial transactions, offering new experiences.
When individuals are delighted by new ways, even long-held beliefs can change, making them more willing to repeat the behaviour, even when the trigger (in this case, the pandemic) is gradually easing out. The life insurance industry, too, experienced the same change and took some of its biggest leaps, in terms of digital, customer service and underwriting in the last one-and-a-half years. The next new normal will be all about focussing on these changing customer behaviours.
The ‘everything digital’ customer
Today, almost all age groups have begun to adopt a millennial mindset when it comes to digital. Speed and ease of transaction will be seen as key differentiator in the days ahead. There will be a need to enhance use of data and accelerate digitisation for heightened customer experience. Artificial Intelligence, Machine Learning, along with intelligent automation, will be the key source of better customer insights and, thereby, faster turnaround.
This customer behaviour will force companies to transition out of legacy platforms and collaborate with ecosystem players to speed up their game, leading to enhanced customer experience and understanding.
The ‘I need more’ customer
The world witnessed a massive shift in the purchasing behaviour of customers – personalisation of every aspect of the customer experience. One-size-fits-all products will not appease customers in the next new normal. The customer will need adequate life insurance and would like to be covered for specific risks. Hyper-personalisation will take a leapfrog, and companies will have to focus on simple, innovative, and differentiated products to cater to policyholders’ emerging needs. This will lead to innovations in the space of protection and health-related covers. These solutions will be simple to understand, will have hybrid features or bundled offerings, and will be available across channels. Simplifying products and the insurance ecosystem so that the customer experience becomes less complex, more efficient, and more tailored, will lead to insurance offerings becoming bespoke, simpler and cheaper.
The ‘experience-focussed customer
Tomorrow’s customer will value life insurance providers who understand his/her needs well and keep customer engagement at the centrestage. Like other e-commerce platforms, the insurer should be able to predict customer needs in advance and advise them through proactive engagement, with a 360-degree view of the customer. Personalisation in terms of tailored solutions, service and even in language, will be a key differentiator, especially in a country like India. Quick response time, faster resolutions, and robust self-service capabilitieswill be the ask of the customer in the next new normal. Life insurers will have to strengthen their use of the decision engine or next-best-action technology to have relevant insights about their customers, carry out need-analysis and, thereby, suggest appropriate products in line with an individual’s needs and behaviour.
The ‘omnipresent’ customer
Customers today have become used to having access anytime, anywhere. They expect services to be available on their fingertips, wherever they are. Customer preference for easy process and digital channels will continue to be on the rise. There will be a critical need to expand service channels, providing more options to engage – physical branches, phone-based contact centres, chatbots, WhatsApp, Mobile Apps and social media. Phygital will be the way to go as this will also take care of the customers in Indian hinterlands who are still looking for physical access. This omni-channel, unified, and asynchronous messaging will help insurers engage with customers on their desired channel and at their preferred time.
The ‘health-conscious’ customer
Anything propagating health and wellness will enhance customer affinity in the future. The pandemic has resulted in an increase in proactive consciousness towards health, and customers will value companies that understand this evolving need. The future will see life insurers evolving as holistic protection partners.
Life and health insurance companies will need to ride on each other’s expertise and work on combo solutions, which can be a one-stop-shop for the insurance needs of a customer. The proliferation of data and connected devices, particularly wearables, will continue to make it easier for life insurance companies to play an active role in shaping customer’s health – to everyone’s benefit.
The industry might see several tie-ups with wellness partners to look at the complete wellbeing of their customers and, thereby, also reduce risks. A definite win-win for both customers and insurers.
The experience of living through the pandemic has changed the way people live and behave. Changes which offered positive experiences will last longer, especially the ones driven by well-being, convenience, and simplicity.
Thereby, digital adoption, value-based personalised purchasing, and increased health awareness will be the customer behaviours that will shape the next new normal. This will be a game-changer for the life insurance industry and provide an opportunity for the industry to think beyond the usual, innovate, and offer granular, value-based and integrated products to meet customer needs.
The focus will be on insurance offerings, which will combine risk transfer with proactive and value-added services and emerge as a differentiator. It will be critical for insurers to stay relevant and adapt with the changing times.
As the world begins its slow pivot from managing the Covid crisis to recovery, it’s clear that some of these shifts in behaviour will define the next new normal. It will change the way consumers behave, in some cases for years to come.
(The writer is the MD & CEO of Aditya Birla Sun Life Insurance)