Revolutionising Insurance Indian consumers are becoming more discerning and tech-savvy when it comes to their lifestyle choices. They value quality and experience and prefer convenient, byte-sized solutions for their financial needs. While we often think of terms of life, health, property, motor, or jewelry coverage, these options can be expensive and long-term. However, Indian consumers today engage with a wide range of products and services that vary from person to person and situation to situation. This is where contextual insurance steps in.
Contextual insurance, as the name suggests, provides coverage for specific situations. Take travel insurance, for example. When booking a flight online, passengers can opt for a byte-sized plan that offers refunds for flight cancellations or complimentary food and accommodation until their rescheduled flight.
Convenience is crucial in driving the adoption of embedded insurance offerings. No paperwork is needed, making the process hassle-free. Examples of contextual insurance also include protection when purchasing smartphones, household appliances, or rental cars.
Recently, cyber insurance has emerged to safeguard individuals against liability in case of a data breach or cyberattack. Affordable premiums and easy management make cyber an attractive choice for tech-savvy consumers.
Many Indian consumers, especially millennials, allocate a significant portion of their income to travel, leisure, technology, lifestyle purchases, and new experiences. Micro-insurance offerings are appealing as they provide instant coverage on the go, allowing individuals to protect against potential risks with a small, one-time policy. Contextual isn’t just for discretionary spending; it can complement traditional, long-term insurance plans.
The growing market for contextual insurance highlights its enormous potential. McKinsey & Company predicts that contextual will significantly increase policy penetration in Asian markets, reaching a $270 billion market by 2030 in terms of gross written premiums.
Personalization is key in today’s consumer experience, thanks to technologies like Artificial Intelligence, Machine Learning, and Big Data. Contextual solutions can seamlessly integrate into existing customer management systems or the point-of-sale systems of service and product providers through open application program interfaces (APIs). These APIs help insurers analyze customer data, such as past transactions and browsing history, to offer customized policies at the point of sale. They also enable engagement across various touchpoints, including laptops, smartphones, and call centers.
Technologies like Artificial Intelligence, Machine Learning, and Big Data allow for a deep understanding of customer behavior and the development of tailored offerings for different customer segments. Insurers can create precise risk profiles for individuals or groups, determining fair coverage and premiums.
Insurers, banks, retailers, e-commerce platforms, and various service providers are increasingly partnering with InsurTech firms to develop personalized policy products. These customized options can be easily delivered to consumers through digital touchpoints, providing affordable and relevant coverage instantly. Many consumers may not realize the benefits of policy until they are presented with coverage options.
Contextual insurance is all about protecting consumers
Contextual insurance is all about protecting consumers in a world where risks can be diverse and unpredictable. It’s set to drive growth in the industry and become a hub for innovation in the coming decade. With personalized customer experiences becoming increasingly important, contextual could be a game-changer for the industry. In a rapidly evolving digital world, it serves as an essential safety net that consumers, seeking transparency, simplicity, and personalization, are willing to invest in.
Contextual insurance is on the rise in India, offering tailored coverage for specific situations, from travel to cyber threats. Its growth potential is substantial, driven by tech-savvy consumers and advancements in data-driven technologies. As businesses partner with InsurTech firms to provide personalized through digital channels, contextual is set to become a key player in the insurance industry, meeting the evolving needs of modern consumers.
Please. also have a look into : CBDT imposes new income tax rule on life insurance premiums above Rupees 5 lakhs
