Challenges faced in Insurance Markets

Various challenges faced in Insurance Markets are

1. Industry Challenges

(i) Commoditization in personal line products.

(ii) Shifting consumer requirements( everyone wants products tailored to them, customization)

(iii) Heightened competition.

(iv) Global economic meltdown.

2. Business Challenges

The key business challenge for most of the insurers is to reduce the turnaround time and improve their speed to market their products.

Distribution Channel pressures and emerging consumer demands for mass customization and hydrid products are moving rapid product development from being a competitive advantage to a necessity.

3. Process Challenges

Lack of stream lined processes, change management,automated processes,central repository.

Solutions

1. New approaches and technology are  needed to manage  and develop insurance  products which reduces the cost and time to market.

2. Speed, quality, efficiency and capacity are different dimentions to counter the above challenges.

3. Product Solutions

Deliver new products/product customizations efficiently, quickly and in a flexible manner.

Making change to existing products quickly.

Meeting demand for combination products i.e developing products that encompass multiple features in todays products.

Speed to match the competition (If market embraces a particular product feature launched by the competitor, other insurer tend to quickly follow suit to meet competition. Example: Consevative LIC introduced Unit Linked Plans to meet competition.

Real time underwriting based on customer segmentation.

Organisational Solutions

For robust performance and growth empower front-line staff and equip them with multiple skills.

Technology Solutions

Quickly respond to business needs by deploying new technologies and applications.

I view global economic meltdown as an opportunity rather as a threat because we are not dependent of other countries as much as other countries are on each other. So an investor in India needs security for his funds than returns at this moment, he is willing to invest even in this downturn. So Insurance companies are not finding it difficult to mobilise funds but to give the promised returns on them. So the investor is willing or happy to invest his funds in a Insurance company which guarantees him a fair return and the one he trusts would do.