The Rise of New Age Insurers in India: A Disruptive Force in the Insurance Sector
The insurance sector in India is undergoing a radical transformation, driven by the emergence of new age insurers who are leveraging technology, innovation, and customer-centricity to offer superior products and services. These insurers are not only challenging the incumbents, but also creating new opportunities and value for the customers and the industry.
Here we explore how these new age insurers are disrupting the insurance sector in India, the key factors behind their success, and the implications for the insurance penetration, industry growth, and customer satisfaction.
So, how are new age insurers disrupting the insurance sector in India?
According to the latest data from the Insurance Regulatory and Development Authority of India (IRDAI), the non-life insurers reported a 11% growth in premium income in October 2023, with new age insurers like Acko and Go Digit stealing the show. Acko, which is India’s first fully digital insurer, registered a whopping 146% growth in premium income, while Go Digit, which offers simplified and affordable insurance solutions, grew by 83%.
These new age insurers are disrupting the insurance sector in India by using data analytics, artificial intelligence, machine learning, and blockchain to offer customized and personalized products, faster claims settlement, and seamless customer experience. They are also tapping into the untapped segments of the market, such as micro-insurance, peer-to-peer insurance, and usage-based insurance, to cater to the diverse and evolving needs of the customers.
The new age insurers are also collaborating with various partners, such as e-commerce platforms, ride-hailing apps, online travel agencies, and fintech startups, to offer innovative and convenient insurance products to the customers at the point of sale or service. For instance, Acko has partnered with Amazon, Ola, Zomato, and RedBus, while Go Digit has partnered with Flipkart, Cleartrip, and Paytm, to offer insurance products such as mobile protection, trip cancellation, health insurance, and car insurance.
So, what is the playbook behind the success of these insurers?
The success of new age insurers can be attributed to several factors, such as:
- Customer focus: The new age insurers are focused on understanding the customer needs, preferences, and pain points, and designing products and services that address them effectively. They are also enhancing the customer engagement and loyalty by offering rewards, discounts, referrals, and gamification.
- Technology adoption: The new age insurers are harnessing the power of technology to streamline the processes, reduce the costs, improve the efficiency, and increase the transparency. They are also using technology to create differentiation and competitive advantage in the market.
- Innovation culture: The new age insurers are fostering a culture of innovation, experimentation, and learning, and encouraging their employees, partners, and customers to co-create and co-innovate. They are also constantly exploring new ideas, opportunities, and solutions to solve the existing and emerging problems in the insurance sector.
- Regulatory support: The new age insurers are benefiting from the supportive and conducive regulatory environment in India, which is enabling them to operate with flexibility, agility, and scalability. The IRDAI has been proactive in issuing guidelines, sandbox regulations, and licenses to facilitate the growth and development of new age insurers.
So the final implications ?
The new age insurers are not only disrupting the insurance sector, but also contributing to its growth and development. According to a report by Boston Consulting Group and FICCI, the insurance penetration in India is expected to increase from 3.7% in 2020 to 5% by 2025, and the insurance industry is expected to grow from $94 billion in 2020 to $280 billion by 2025. The report also highlights the role of new age insurers in driving this growth by enhancing customer awareness, trust, and satisfaction.
The new age insurers are also creating a positive impact on the customers, the industry, and the society, by:
- Offering better value proposition: The new age insurers are offering better value proposition to the customers, by providing them with more choice, convenience, and control over their insurance needs. They are also offering lower premiums, higher coverage, and faster claims, compared to the traditional insurers.
- Improving financial inclusion: The new age insurers are improving financial inclusion, by reaching out to the underserved and unserved segments of the market, such as the rural, low-income, and informal sectors. They are also offering micro-insurance, peer-to-peer insurance, and usage-based insurance, which are more accessible, affordable, and relevant to these segments.
- Promoting social good: The new age insurers are promoting social good, by addressing the social and environmental issues, such as health, education, agriculture, and climate change. They are also supporting the government initiatives, such as Ayushman Bharat, PM Fasal Bima Yojana, and Atal Pension Yojana, which aim to provide social security and welfare to the masses.
To conclude, the insurance sector in India is witnessing a paradigm shift, thanks to the new age insurers who are redefining the way insurance is bought, sold, and serviced. These insurers are not only disrupting the insurance sector, but also creating a positive impact on the customers, the industry, and the society.
As a leading consulting skill-edtech provider, we at Grazing Minds believe that the new age insurers are the future of the insurance sector in India, and we applaud their efforts and innovations.