Published on Jul 31, 2019
Updated on Oct 16, 2019
The Indian insurance market is undergoing a rapid change. The focus on digital cannot be limited to customer acquisition since customer engagement is the key. However, some customer segments depend on traditional insurance channels of interaction.
Problems With Traditional Insurance
With customers split into different segments, insurers require hybrid methods to satisfy the needs of all. A reimagined approach to the network and methods of interaction to provide seamless and frictionless experience is the need of the hour.
Phygital, as a paradigm, challenges the cascaded approach of traditional insurance and bridges the gap between both the worlds effortlessly.
The insurance industry is expected to touch sales of US$ 280B by 2020. However, there is still a trust deficit between customers and insurance companies primarily due to suspect products with unrealistic returns being sold in the past decade. This causes the customer’s experience to be very different both online and offline for the same customer.
Enter Phygital
The amalgamation of ‘Physical’ and ‘Digital’ or ‘Phygital’ experience can help the insurance industry amplify their yield, manifold. Phygital models can enhance the insurance buying experience. It can increase customer interactivity in insurance and enhance the overall customer experience. The sole objective of Phygital is to provide the ultimate 360-degree experience, i.e focus on relationships, life-cycle, and even life-stages.
Source: Accenture
What’s After the Death of Traditional Retail?
Ever since Marc Andreesen predicted the death of traditional retail, the e-commerce vultures have been circling. Consumers worldwide, purchased US$2.86 trillion on the web in 2018, up from US$2.43 trillion the previous year. In India, growth is even stronger. Online retail in India is growing at a faster pace and is expected to be worth US$170 billion by FY30, growing at a CAGR of 23%.
The insurance purchase process today mostly take place in the digital medium before the customer consciously seeks a sustained physical engagement. The insurance companies then take initiatives for either influencing their conversion or closure.
In this, the customer journeys are mostly “ phygital ” – i.e. customers jump between digital and physical touchpoints while making a purchase decision.
All these possibilities have spun a whole new disruption story through well-orchestrated alignment along the phygital retail journey.
Along with large marketplaces, the Indian insurance sector is the sandbox for medical operators, payment platforms, and insurance aggregators.
Brands Bringing Phygital Disruption in Indian Insurance
Flipkart and Amazon
Both the consumer-tech giants have a strong understanding of how to track and influence customer journeys. With a large and loyal customer base who come to them for buying “everything”, they have a clear edge at Phygital disruption in insurance.
“Insurance” is the highest revenue-generating keyword for Google. The recent announcement of Google car (Waymo) to join hands with Trov to provide car insurance for its driverless cars. This demonstrates the innovative path Google seems to be favoring at this stage in the insurance space.
PolicyBazaar
Large aggregators like PolicyBazaar, originally just a portal to compare quotes, realized the significance of “phygital marketing” in Insurance and invested in “last mile feet on the street” for adequate engagement.
PayTM and Phone Pe
Payment platforms like Paytm and Phone Pe also are in a strong position to build an insurance distribution franchise. They are already distributing a selected set of products tailored exclusively for each customer, in their mall/store, leveraging their phygital distribution reach.
Practo
Medical platforms like Practo has created a large data-rich ecosystem of customers and medical service providers; making them a powerful channel to distribute health insurance – and in due course life insurance.
Final Thoughts
Phygital is a bridge between traditional processes and the swiftly growing digital space. Insurer distribution models that blend both digital and physical experiences for its customers will stand to gain a significant advantage over competitors that are yet to embark on their digital transformation journey. An omnichannel marketplace that brings the customer on a unique buying experience will draw the most visibility complete with data-driven analytics and insights to personalize the modern ‘buyer-seller’ relationship.
What is your take on the future of Phygital insurance?
Let us know by commenting.
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