World over,  the insurance industry is witnessing challenging times. 2020 was an extremely demanding year for the insurance industry. However, despite the pandemic, companies that let innovation, digitalisation and customer satisfaction emerge successful.

Now many companies spent most of the last year reacting to the global pandemic threat- in mitigating risk and learning to survive. These learnings will certainly help us to traverse through the challenging times.

One of the major positive impacts witnessed is the large scale digital adoption. When customers and businesses align to these digital channels, there are three areas that businesses will align to.

  • Focusing on channel diversification.
  • Development of innovated products.
  • Leveraging of the advances already made in this digital adaptation.

Now in the wake of the present crisis, insurance have rapidly adapted to digitalisation efforts. However, more needs to be done in the areas of focus I mentioned – to leverage on the future behaviour of consumers.

Then again, this industry has largely been bearers of legacy. Insurance has always been a rather complex proposition for a normal consumer.  Then the industry must and should in retrospect need to shift this paradigm to meet the expectation of todays evolved and demanding customers.

We are also at an advantage as Sri Lanka has a relatively low level of insurance penetration. This is an opportunity for all of us to improve our offerings and reach diverse segments.

Finally, as the economy peaks up, income levels are expected to rise, and our aging population also gives us an opportunity to find solutions to a rise in need of a cover.

From a consumer’s standpoint, insurance becomes affordable if bought at an early age and while in good health. Now buying early enables locking in the premium at affordable rates over a longer period of time. It also eliminates the worry of obtaining an insurance cover in the event of any unfortunate health incident later in life.

Insurance also becomes affordable primarily when we move from an investment platform to a due protection platform.

Now we need to shift the market paradigm on how insurance is perceived today. Insurance is to be viewed as a way of mitigating risks – protecting the things that matter in life such as providing for the family in the event of death or maintaining the current standards of living in the event of a disability or critical illness, securing your child’s higher education or even securing their own finance for retirement.

Now such a shift will allow for higher penetration and make such products much more affordable for the masses.

What strategies should insurers adapt?

In Sri Lanka, like any other developing market, insurance is highly dependent on a pusher’s strategy for which in turn relies largely on the skills and competence of the financial advisor.

Now while we acknowledge the advances made in digitalisation, we also understand that this market for the foreseeable future is going to be man power dominated and driven. Therefore, cohesive strategies should be in place to attract, train, groom and retain the right people.

Now insurance will continue to be a people industry. On another point, omni channel is the future of insurance. Distribution has evolved in our industry all over the market and insurance have been impacted in every way by digitalisation- including Sri Lanka.

The omni-channel models are gaining momentum in several markets as it allows for reaching and servicing multiple customer segments through integrated channels and platforms.

Finally, creating efficiency around corporations at the delivery platform is another strategy that insurers might need to adapt – making the buying and the fulfilment cycle convenient, effortless, fast and transparent.

Now the current complexity associated with insurance products lead to a longer buying process –with issues relating to transparency, trust and also the product understanding.

The insurer also need to address the last buying issue – that is to make the claims process seamless and swift to make the customers feel assured. Such measures need commitment and investment to build platforms to reach and service customers throughout their lifecycle