Most customers have mixed feelings about Insurance in general. Generations have invested in it because they must. And every generation has wondered why they need to pay these premiums, which make a significant dent in earnings. Insurance is a protection against all the what-ifs in our lives and that is probably why every parent has advised their children to invest in insurance as soon as they start earning. Well that, and the fact that there is an income tax benefit if you invest in insurance.
In India, the most purchased insurance is life insurance, health insurance, and motor insurance. There are 24 life insurance providers in India, 24 general insurance providers, and 6 stand-alone insurance providers. In the general insurance industry, health insurance holds about 26% of the market while motor insurance holds about 22% of the market. Even though some general insurance products like motor insurance is mandatory in India and Insurance as a product lapses if even one premium payment is missed, the lack of timely policy renewals and policy churn has become the biggest challenge that insurance companies face.
Paytm is an industry leader in designing payment solutions, and our research on consumer behavior has led us to create the perfect payment solution suite for insurance providers that will help address this huge roadblock.
Customer is king and convenience is key
Customers are different from each other as are their approach to savings or planning for risk mitigation. While some like term plans, others prefer endowment plans. While some take health plans, they don’t take for the accident insurance rider and similarly, while everyone gets motor insurance many don’t take the zero-depreciation option. Similarly, when it comes to making insurance premium payments almost all customers know and understand online/digital payments, but not everyone likes or prefers the same type of payment mode. Some prefer to pay via credit card, while others prefer a debit card so there are no credit card dues later on. Some prefer to just use the NetBanking facility or to make payments via UPI. Some go a step further and want to set up recurring payments towards insurance premiums. Paytm payment solution suite for insurance providers has been designed keeping customer convenience in mind and provides the maximum number of pay modes to customers. The Paytm eNach mandates for recurring payments also have the highest setup rate and successful debit rates, all of which go towards minimising policy lapses and churn.
The power of choice
Insurance providers have teams of people whose job is to simply remind people that they have insurance renewals that are due or have been missed. On being contacted, often the customer had just got caught up in other things and had forgotten to make the payment. At a time like this using the Paytm payment solution suite insurance providers can give customers the power to choose from making a payment right then and there using a payment link or dynamic QR code, sent to them via text or email. Or if they prefer the insurance provider can extend them the service of collecting cash or sending someone over with an EDC machine for a physical card payment. This sense of urgency and the power of choice encourages the customer to make immediate payments.
Paytm, BBPS and beyond
Insurance providers that chose to go with the Paytm payment solution suite get the advantage of being onboarded to the Bharat Bill Payment System as a Business Operating Unit (BOU). Paytm is one of the very few service providers with this ability. Once onboarded as a BOU the insurance provider gets immediate access to all the other service providers that have onboarded a customer. These could be other wallets or other payment services. This saves the insurance company the time and the effort for creating separate tie-ups with all the different payment service providers and gives the customer the freedom to choose to make their payment through any wallet or payment service.
Paytm has created the payment solution suite for Insurance companies specifically to improve renewals, reduce policy churn, and increase sales. Paytm is already the payment solution partner of choice in the insurance industry with 20 life insurance, 17 general insurance, and 3 standalone insurance providers successfully onboarded.