As a whole, 2020 was characterised by uncertainty and challenges. However, every organisation did not react in the same way to survive in the rapidly changed circumstances. While some industries experienced an unfavourable impact, others found new avenues of growth. The pandemic gave communities and businesses an impetus to innovate and rethink on how they operate. Across the world and in Bangladesh, companies have found new ways to deliver for customers by upgrading their infrastructure and operations, and by offering new services and ways to connect.
Bangladesh is rising against all the obstacles like it did many times in the past. The economy is beginning to show signs of recovery. The Government is taking active steps in all sectors including health, infrastructure and finance to sustain our previous growth momentum.
The pandemic has brought greater focus on people's health, the need for financial protection and the tools that enable this - including insurance. Bangladesh's life insurance penetration stands at only 0.5 percent, well behind the average of 3.3 percent of the emerging markets. This means that most of the Bangladeshis are living uninsured. The situation warrants insurers to take active steps to close the gap and help people access the financial protection they need.
In recent years, both the regulator and the Government have been driving several encouraging initiatives to strengthen confidence and create awareness about insurance among the population. 2020 also marked the celebration of first-ever National Insurance Day which paved the way for all the insurance providers and the regulator to join in bringing more people under the protection of insurance.
As we celebrate Bangladesh's 50th anniversary of independence in 2021, I am sure we will see even more collaboration to realise the insurance industry's potential. In addition to this, several factors will be crucial in sustaining the sector's growth opportunities in 2021:
Paying close attention to changing consumer behaviour
Insurance industry's interaction with customers has long been characterised as transactional and sporadic. However, we must change this to become proactive in understanding customer emotions and the drivers which influence their financial decision making. Covid-19 has marked an era defined by uncertainty and lack of safety. But humanity has always survived with empathy, hope and optimism. These will persist as we navigate our lives in the new normal. Insurers need to understand how people's behaviours are impacted. They also need to predict how this will change in the future.
Contrary to the popular belief, it is hope and optimism – not fear – that often influence the purchase of insurance. Customers consider life insurance or financial protection from a place of hope. Highly positive consumers are more likely to consider purchasing new or additional insurance for themselves or their family members. That means that they also expect complete honesty and transparency from their financial service providers in mitigating uncertainty. Greater awareness about financial planning tools will help customers find the right financial product and service provider.
Focusing on health, safety and convenience
If there is a time when collectively everyone is thinking about safety and convenience, that time is now. As a result, safety concerns are taking precedence in customer decisions. This has also propelled faster adoption of digital technologies. Traditionally, insurance businesses relied on face-to-face interactions in selling insurance policies. However, both customers and insurers are quickly getting used to contactless, digital ways of purchasing and maintaining policies.
While Covid-19 has diminished face-to-face contact, the agent relationship is still critical to building confidence in our customers' purchasing decisions. Insurers need to keep working to identify areas where digitalisation can better enable hassle-free interaction between customers and agents.
The ongoing pandemic is further reinforcing people's focus on their health and wellbeing. 2021 will likely see a rapid rise in digital health services. Insurers should incorporate value-added services into their offering that move them from being a reimbursement provider to a more holistic partner. We can see encouraging developments as organisations are utilising digital healthcare services such as telemedicine and personal wellbeing management to create a unique value proposition for their customers.
Promoting insurance education for the young
One of the success factors for Bangladesh's tremendous economic growth is its young population. With the population median age being just 27.6 years, a large group of young people are ideally positioned to take advantage of financial protection tools like insurance as they take their lives in diverse directions.
At a young age, the premium may also be less compared to a more matured age, making it easier to buy and continue life insurance policies. Insurers need to understand the power of these young individuals and rethink how they can be made more aware of the financial alternatives including insurance for their financial planning.
There is no doubt that 2020 has been tough for everyone. It is easy to be discouraged at these times, but understanding the challenges is the first step to weathering them. Businesses that are open to changes and that turn ideas into action faster will stay relevant to the market.
This means insurers will need to be more customer-centric to understand and respond to the fast-changing needs of customers. They also need to initiate new dialogues with customers, employees, and their communities to address and react to wider issues. Looking ahead, some uncertainties in the global and local economy are likely to remain but we believe organisations including insurers who can turn these challenges into opportunities of reinvention and transform will thrive in the new normal.
The author is the General Manager of MetLife Bangladesh
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinions and views of The Business Standard.