Amid the COVID-19 pandemic induced push towards digitization, there are opportunities for insurance companies to identify new distribution channels. Insurers in India, for instance, are increasingly collaborating with payment tech companies (paytechs) to sell their policies and sustain growth, says GlobalData, a leading data and analytics company.

Ayushi Tandon, Senior Fintech Analyst at GlobalData, comments: “Insurance companies in India that have collaborated with paytechs are likely to reach a large customer base in a fast and inexpensive way. The strategy can work well as the use of payment platforms has dramatically increased in the country over the recent past, especially after the demonetization and during the COVID-19 pandemic. It can also simplify the entire customer journey in insurance, from purchases to claims.’’

An analysis of GlobalData’s Disruptor Intelligence Center reveals how the concerted efforts of insurers have been acting in their favor in India to expand customer base and build their brands.

For instance, ICICI Prudential partnered with India’s online payments company PhonePe in January 2021 to sell term life insurance plans. Individuals can avail the insurance instantly through PhonePe app with zero paperwork and without the need to go through traditional health check-up. The partnership is backed by the convenience and seamless experiences that mobile technology can offer to customers.

Bharti AXA tied up with digital payments company Airtel Payments to offer health insurance plans related to the pandemic. The deep distribution reach of Airtel in Tier-2 and Tier-3 regions of India can help the insurer to offer its insurance products available for millions of customers digitally.

During the onset of the pandemic, Reliance General Insurance collaborated with Paytm to launch its COVID-19 benefit insurance policy. The entire process of purchasing the policy can be completed by just using the Paytm app, eliminating the need for any manual documentation. It was convenient for customers to sit back and get insured without any hassles. Paytm has approximately 450 million registered users, who could avail this service.

Ms Tandon concludes: “The digital acceleration caused by the COVID-19 pandemic complements the high penetration of digital payments platforms in India. Against the backdrop, insurers are trying to bridge the coverage gaps in the country by collaborating with paytechs that offer alternative distribution channels at low cost and minimal risk.”