6 lessons learnt from People of Insurance (POI) in 2021

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Last year, we started a series called People Of Insurance and since then we have had the opportunity to talk to experts like Atul Mehta, Sagar Sanyal, Sankar Mohan and more! It’s been so exciting to have conversations with them and share those things with you! Together, we learnt a lot more about the industry and about what kind of trends we can see moving forward. We learnt about trade insurance and about the health industry.

 

These are historical times and talking to the people who love and are truly below the insurance industry helps us all to get a better perspective on what is happening.

 

Today we are excited to be sharing some of the things that we learned throughout the year by talking to experts in the insurance business.

 

For those of you that don’t know, People of insurance is a series by Assurekit where we invite experts and people from the insurance space to share insights, opinions and stories from the people of the insurance industry. This is whether they have years of experience in the space or have just joined the insurance industry.

 

Let’s get started!

 

“Insurance is the handmaid of commerce.”

-Sankar Mohan

 

The insurance industry is the backbone of trade and commerce. The insurance sector delivers the promise of financial security and continuity to business due to unforeseen insured events. . Hence in matured organisations, Insurance is considered as part of the Balance sheet, rather than the Profit & Loss segment of accounting.

 

Managing risk is a special characteristic of insurance that brings about economic development in a nation. It also functions as a middleman to the growth of any nation. The insurance sector offers confidence to trade and commerce practitioners to take up new ventures and investments without the risk of a major loss. Thus, it is safe to regard insurance as the handmaid of commerce.

 

“I see insurtech headed by really bright founders giving back control to the end consumer.”

-Mahavir Chopra

 

Technical inventions and remodelling that are introduced in the field of insurance in order to improve its competence and effectiveness are termed insurtech. It is an effort to revolutionise the insurance industry by adopting the latest technology to satisfy customer expectations. It is a fruitful attempt to strengthen the link between what a customer wants and what a company wills to deliver.

 

Mahavir further explained that it helps insurance companies in their functioning, service and monetary cost. Insurtechs are working hard to create a customer-centric space in the insurance sector. It has enabled insurance companies to not only offer the best and the most optimised product to the consumers but also to do so with efficiency. It aims to bring equality in information access. The ultimate showrunner in the world of insurtech is the consumer and it continuously strives to hand them due to control.

 

“It (Trade credit insurance) covers the risk of buyers not paying their dues to the seller”

-Akshay Bhardwaj

 

By Akshay Bhardwaj, we learnt that trade credit insurance provides coverage to the seller against non-payment in case of delivery of goods. It manages the risk of default in payment and softens its financial blow on the seller. The concept of trade credit insurance materialised in the early nineteenth century but it only fully came to life during the World Wars. It helps sellers to deal without the fear of grave financial setbacks.

 

In terms of business expansion, trade credit insurance offers comfort to grow in an unfamiliar environment where the seller is more exposed to the risk of non-payment by the buyers. The bill discounting feature allows a smooth capital flow. However, due to the global pandemic, the risk management potential has gone tremendously down while the demand for trade credit insurance among sellers has risen.

 

“They (people) have begun to view insurance as an investment rather than an expense.”

-Ruchir Kanakia

 

The past two years have been a test of will and wit for both, the buyer and the seller of a product. The Covid-19 pandemic has made the population realise the importance of health insurance. The likelihood of medical expenses has risen and people have understood that health insurance is essential to avoid the financial brunt in such a setting.

 

Similarly, insurance companies have also felt and learnt from the change of events. Unlike the past times, now instead of the insurance companies seeking for customers, it’s the customers who are out looking for the best health insurance plans. Consequently, insurance companies have adopted several strict guidelines and rules to avoid the risk of extreme repayment. Digitisation has also increased in the insurance sector due to the pandemic.

 

“I think digital insurance is all about streamlining the customer and the distributor’s experience in a way that there is minimum human intervention.”

-Atul Mehta

 

When traditional insurance is carried out through a digital platform so that the entire process is paperless and technology-driven, it is called digital insurance. Under digital insurance, all the activities and procedures involved in traditional insurance are performed using digital spaces.

 

The pandemic made digitisation a need of the hour for insurance providers. This digitisation in turn enlarged the reach of insurance companies. One broker can now reach and distribute policies to people all over the country. Digital insurance also bridges the gap between customization and segmentation of products as per the consumer’s requirement.

 

“The risks will remain, so insurance will remain. Slowly more and more people will realise that no one can afford to remain uninsured.”

-Sagar Sanyal

 

The consumer requirements and demands are ever-expanding. The only rational way to deal with the vast pool of demands is to treat it as a business opportunity instead of a threat.

 

The fast adoption of technology has exposed businesses and individuals to the risk of falling victim to cybercrimes and thefts. Insurance companies hold the potential to venture into the field of offering cyber insurance with a systematic plan.

 

Similarly, recent developments have proved that businesses face the threat of temporary shutdown or interruption, e.g. lockdowns due to Covid-19. Insurance can also transform their weak spots, such as lack of trained manpower or rural reach, into scope for business enlargement. Thus, insurance companies are mitigators of risk, the higher the risk, the higher the opportunity for their growth.

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