Insurance products are more or less same across insurers, the same is truer for non-life insurers but true for life insurers as well. We will give a reasoning supporting the argument, if any one of us have the experience of comparing insurance products on the websites of different insurers or a web aggregator, we pretty well know that either we look for motor insurance, health insurance or any other retail or corporate insurance product there will be a very minor difference among the terms and coverages which will be beyond a layman’s interpretations.
Wordings of many policies like motor and fire are tariff driven which needs to be same across the industry and IRDA also recommends to keep wordings similar in a few other lines of businesses like health and there is also not any major variation in add on covers offered. In corporate insurance product like package polices and liability products we will find the coverages same although a minor variation in policy terms shall be there.
Now the products being almost same in structure and properties insurers need to create differentiation by other ways to increase the value proposition among the customers and create its brand name in the market.
This differentiation can be in terms of employing latest technologies, speedy claim settlement, best customer service, innovative distribution, enhancing consumer experience, hassle free operations so on and so forth. In addition to these, every insurer must be evolving the product range to better address the customer needs.
But the question here comes that as per opening paragraph there is a scope of less difference in products wordings and terms then how to evolve the product range and in what manner and context? In the current article we will clarify this and present some views on the same in the retail product context of both life and non-life insurance.
Evolving the product range should be in the terms of variety and product depth, the insurer should have in its kitty all the insurance products which the customer can need also the same should be affordable, easily available in online mode and without any hidden surprises and insurance jargons involved.
Continuous innovation and research with the marketing strategies rigorously followed is the key to identify opportunities and come up with a solution to tap the market. First movers and quick implementers will have a sure shot advantage over others.
Apart from traditional products like motor package, householders’ package, vanilla health and life insurance products which every insurer has in its bouquet we below discuss about five products which are in demand and should be included by an insurer in its product range.
- Retail Cyber insurance – Rising incidents of data theft and transactional fraud have made this product an important one for retail customers as well. Many general insurers have already included this product in their range which covers and individual and family against cyber risks, phishing/spoofing, unauthorized transactions and legal advice as well. Product should start from a normal sum insured of 20k and an affordable price of 600-800 with straightforward coverages and exclusions which is easily understandable.
- Disease specific products – With the arrival of the COVID era insures were able to launch quick the COVID specific products which got a good response in the market. Similar disease specific products like dengue, cancer, malaria, heart diseases amongst others are available for purchase. Some health insurance products for people having pre existing conditions like diabetes will also gain nice demand.
- Mobile and home appliances – There is good market for mobile and home appliances insurance covering accidental and liquid damage, electrical and mechanical breakdown and theft. A few new insurers are doing great in having tie-ups with online retailers to sell these products and generate good chunk of premium.
- Pay as you go motor insurance – Recently a reputed general insurer has initiated the row with launching of a pay as you go motor insurance product which is already in a good demand in developed markets. Instead of relying on traditional pricing parameters like age of the vehicle and engine capacity this new product prices the product more accurately on driving behaviour, other vehicle data and driving patterns which can be tracked through IoT sensors installed in the vehicle. Now the driver with a good track record will enjoy lesser premium than other which will certainly create a differentiation amongst insurers who can employ technology properly and bring the concept to a success.
- Bite size insurance products – Many small size insurance products costing as less as a few paise to a few hundred bucks are selling successfully in the market because it suits the needs of the consumers well. A few good examples are Ola ride insurance, IRCTC travel insurance, insurance products provided by telecom companies to payment gateways and wallets. These small size toffee insurance products will be in demand in coming years and insurers need to harness this opportunity.
We have just tried to include some products which the new generation customers of India need but as mentioned earlier continuous improvement in product range is required by the insurers to serve the consumers and society well.
The distribution of these products having tie ups with various players will matter most but for that there should be a well versatile range of products which satisfy every small and big needs and wants of the consumers.