Today’s banks are one-stop shops for comprehensive financial solutions. Aside from providing banking, investment, and credit facilities, banks create value for customers through bancassurance—in other words, by selling insurance as an insurance carrier agent.
Bancassurance has been around for years, and buying insurance from a bank is nothing new. But the model has its weaknesses, and digital insurance is making those weaknesses very prominent. As insurance distribution undergoes a sea change, solutions to the issues plaguing bancassurance are coming from insurtech companies like Turtlefin.
Pain points of bancassurance
1. An extra, inconvenient step: The conversion of banks into insurance agents made policies more accessible to consumers for a time. Bank customers could buy a policy when visiting the bank for routine work. But people hardly ever go to the branch office anymore. They also lack the time and inclination to take the extra step of sourcing a policy from a bank (or, for that matter, from an insurer or a financial advisor).
2. Generic, ‘free-size’ products: Traditional insurance policies are mass-produced solutions. The consumer selects the coverage amount and provides some basic information. Based on this, the insurer underwrites the policy and sets a premium. Sometimes, buyers can select add-on covers and riders, but any personalization ends there. The scope for customization is limited.
3. Knotty buying process: Over Complex paperwork and the use of legalese are among the biggest difficulties for insurance buyers. Other sticking points for digital insurance platforms are weak digitization and a poor online transaction experience. When the process of buying insurance feels tough, potential customers may decide to look the other way. Many of them would rather stay uninsured than face the hassle of insurance purchases.
4. Insure tech improves on bancassurance
Many smartphone owners use digital wallets and trading apps. Already familiar with online finance, these digitally savvy consumers demand seamless insurance journeys. Insurance tech makes that happen.
Meeting customers where they are: Travel websites make it easy to buy flight tickets. Ever so often, they slip in an embedded travel insurance offer at checkout.
The offer is directed: The customer needs travel insurance for the journey.
The offer is convenient: The customer receives the offer while finalising their travel-related transaction.
Such offer bundling transforms the travel site into a digital insurance platform. The customer does not need to approach a bank, an agent, or a carrier for any travel insurance needs. Convenience is king!
5. Offers tailored to each customer: The mass-produced policies of old-school bancassurance won’t cut it anymore. The digital consumer wants a tailored protection plan, which insurtech companies can provide. There are all kinds of use cases:
A customer pays a pharmacy bill through his digital wallet. Based on the transaction activity (buying medicines), the wallet makes him a health insurance offer.
A pet owner picks up pet health insurance while buying dog food online.
A new mum has recently started buying infant food and diapers via an eCommerce site. On her third purchase, the site suggests a child insurance plan to safeguard the little one’s future.
6. Lower cost of protection: Personalization opens the door to niche offerings that are tied in with the cost of the item being insured.
An online shopper might choose a comprehensive damage protection cover over the standard warranty that comes with a new smartphone. The damage protection premium is affordable, and it’s based on the price of the phone.
A landlord rents out her home for three months a year through services like Airbnb. Instead of a yearly home insurance plan, she gets pay-per-night home insurance. By purchasing coverage only for the nights that she has bookings, the landlord saves a packet on the premium.
7. Digital insurance made better: Powered by advanced technology and application programming interfaces (APIs), new-age platforms and marketplaces that sell insurance online offer a seamless and personalized customer journey. Advanced tech makes the insurance journey far more intuitive and even invisible.
Artificial intelligence (AI) and data analytics process big data to create personalized offerings.
Machine learning (ML) eases the paperwork by auto-filling forms based on existing customer information.
Low-code software such as the insurance API allows non-insurance businesses to sell policies on their channels.
Making digital insurance easy and accessible
To sell insurance online, an insurance platform today needs robust technology. An insurtech enterprise like Turtlefin leapfrogs insurance sellers into a new golden age.
Turtlefin works closely with banks and financial institutions as an insurance technology enterprise.
A Leading Dubai Bank: For insurance specialists at the Dubai-based bank, fetching quotes was tedious. Turtlefin streamlined things by developing a common API. The time required to offer a quote dipped by 60%.
A Leading Indian Private Sector Bank: India’s fourth-largest private bank wanted to provide speedier quotations and make user management more efficient. Turtlefin developed an insurance distribution platform to smooth the customer journey and a back-end tool to facilitate user access management.
Turtlefin also offers an insurance API to transform any online sales channel into an insurance platform. Thus, even non-insurance businesses get to compete in a fast-growing market.
Click to know more about Turtlefin’s SaaS Platform:
Getting onboard the digital insurance train is completely hassle-free. We have experts take over the integration phase so that your team does not look away from their core business. Turtlefin ensures that entering the digital insurance ecosystem is quick, convenient, and easy, much like buying insurance in a digital world.