Markets

Over 45% of urban Indians to increase health insurance spending

Over 45% of the urban Indians are planning to increase their health insurance spending in the next six months owing to pandemic-induced risk realizations, according to a joint study conducted by Facebook and the Boston Consulting Group (BCG). “With increased focus on health & immunity and near-term income concerns, higher need for protection cover and investment options,” the joint report shared with ET said. “The strongest sentiment among customers is for Life and Health insurance.”

The study forecasts not only a sharp rise in demand for health insurance products over the upcoming months but also an increased influence of digital modes for insurance purchases.

As per the report, over 60% of the insurance purchases have become digitally influenced whereas 58% of the insurance agents are selling products and managing renewals through virtual modes. In terms of products more than 60% of the respondents found “bite-sized” products to be useful.

“Even amid the income uncertainty, Insurance as a category has witnessed a positive spending sentiment due to the increased consumer focus on health, wellness, and safety,” said Vikash Jain, Managing Director and Partner, Boston Consulting Group.

In the urban and affluent segment, nearly 40-45% of consumers will get influenced by digital modes while deciding to purchase insurance schemes as per the study. Before the coronavirus pandemic this was at 30%.

A senior Facebook executive told ET that top insurers such as ICICI Prudential, Bajaj Allianz, SBI Life, Kotak, Aditya Birla Health and aggregators such as Policybazaar have increased their social media footprint over the last three months in line with the newfound surge in consumer demand for insurance to generate new leads and scale existing services.

“Covid has disrupted the agent network‘s ability to generate leads which they used to do using predominantly offline channels,” said Sandeep Bhushan, Director and Head, Global Marketing Solutions, Facebook India. “Top insurers are working with FFOAS to use our hyperlocal solution that will allow them to generate leads at an agent level for hundreds of their agents.”

While Facebook will not directly get into the business of selling insurance or other financial services in the near term, the US-based social media giants sees its position in the broader fintech ecosystem as a digital interface between customers and financial institutions for front-end communication.

“We are also working with top insurance companies to start conversation-based customer acquisition using Whatsapp and Facebook Messenger platforms,” said Bhushan.

“Given that insurance selling is heavily dependent on conversation between the prospect and the face to face agent or call centre agents, insurance companies are building chat flows on Whatsapp and Facebook Messenger that can replicate the in-person conversation flows,” he added.

Facebook has also tied up with several leading banks including HDFC Bank, ICICI bank, Kotak Mahindra and RBL Bank for providing basic banking services on Whatsapp.

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