Simple, Low-Ticket Insurance Products Can Address Affordability Issue in India: Sameer Mathur
In a recent interview with Gyanendra Keshri of DH, insurance expert Sameer Mathur provided a nuanced perspective on the challenges facing the insurance sector in India. He argued that the core problem is not affordability, but rather issues related to product design, distribution incentives, and claims experience. Mathur emphasized that by focusing on these areas, the industry can better serve the population and bridge the insurance gap.
Redefining the Affordability Narrative
Mathur challenged the common notion that affordability is the primary barrier to insurance adoption in India. He pointed out that many Indians are willing to spend on various goods and services, suggesting that the issue lies elsewhere. According to him, the traditional insurance products available in the market are often complex, poorly designed, and do not align with the needs of the average consumer. This mismatch leads to low uptake, even when the products are priced reasonably.
"The problem in India is not affordability, but product design, distribution incentives, and claims experience," Mathur stated. He explained that insurance policies need to be simplified and tailored to address specific, low-cost risks that people face daily. By creating low-ticket products that are easy to understand and purchase, insurers can make insurance more accessible and appealing to a broader audience.
The Role of Fintech in Driving Inclusion
Mathur also delved into the critical role of fintech in promoting financial inclusion and driving the adoption of low-ticket insurance. Fintech companies, with their innovative approaches and digital platforms, can streamline the distribution process, reduce costs, and enhance the customer experience. They can leverage technology to create user-friendly interfaces, provide instant policy issuance, and facilitate seamless claims processing.
Fintech can revolutionize how insurance is delivered in India, he noted. By integrating insurance offerings with other financial services, such as digital payments or savings accounts, fintech firms can embed insurance into everyday transactions. This approach not only increases visibility but also makes insurance a natural part of financial management for consumers.
Key Areas for Improvement
To address the current challenges, Mathur highlighted several key areas that require attention:
- Product Design: Insurers should develop simple, transparent, and flexible products that cater to specific needs, such as health emergencies, crop failures, or accident coverage, with low premiums.
- Distribution Incentives: Aligning agent commissions and incentives with customer satisfaction and long-term policy retention, rather than just sales volume, can improve trust and adoption.
- Claims Experience: Streamlining the claims process to make it faster, more transparent, and less cumbersome is crucial for building consumer confidence and encouraging repeat purchases.
By focusing on these aspects, the insurance industry can overcome the perceived affordability barrier and tap into the vast untapped market in India. Mathur's insights underscore the need for a paradigm shift in how insurance is conceptualized and delivered, with a strong emphasis on innovation and customer-centricity.
