Reinventing Life Insurance: A Story of Human Empathy, Digital Tools, and Untapped Markets

By Akhil Almeida

Three years ago, the COVID pandemic pushed the pause button on the world. But as they say, "Life finds a way," and we did. We rolled with the punches, hopped onto the digital train and rode it into a new era. At Aegon Life, we found ourselves presented with an opportunity to reevaluate, to innovate, and answer a question that had long been knocking on our doors: How could we extend our reach to those corners yet untouched by life insurance?

The Elephant in the Room

Turn back the clock to the dawn of this century and you'd notice that life insurance was not on everyone's radar. Fast forward to today, and although we've come a long way, a significant proportion of the population still finds itself either underinsured or not insured at all. Back in 2021, the mortality protection gap in India stood at a whopping USD 40.4 billion. Imagine this as a house that's 91% empty, a void waiting to be filled. An unfortunate event like the death of a family's primary earner could leave the family with only 9% of the total financial safety net needed.

Why the gap? The answer isn't elusive. Overwhelming paperwork, confusing products, and a significant time investment have kept many from finding comfort under the insurance umbrella. But here's the twist: this sizable demographic, often referred to as the 'Emerging India,' isn't off the grid. These folks are online, armed with smartphones, and actively taking part in the digital financial landscape. Why shouldn't they enjoy the peace of mind that comes with life insurance?

The Self-Employed Conundrum

In 2021, India was home to 333 million self-employed individuals. That's 333 million people working on their own terms, pursuing their dreams, and creating value. But when it came to securing their family’s future, traditional insurance methods hit them with an extra hurdle—documenting a steady income source. They found themselves trapped in a maze of documents.

Welcome the Account Aggregator Model

At Aegon Life, we believe in questioning the status quo. So, we turned to technology, to the Account Aggregator (AA) network. The AA network uses technology to enable a quick and secure exchange of data between financial entities, all based on the user's consent.

So, when an aspiring policyholder approaches us, all they need to do is key in their mobile number. Our systems promptly delve into their bank statement, and like a discerning friend, assess their lifestyle and financial standing. And voilà! In mere seconds, we can decide on their policy eligibility.

With this leap, and the introduction of affordable policies designed for self-employed folks and low-income groups, we're seeing our customer base metamorphose. Those once uninsured or underinsured now find themselves holding the security blanket of a life insurance policy.

Crossing the Chasm

Over the past year, we've been breaking barriers and stepping into untapped markets at an unprecedented pace. Just last March, self-employed individuals made up 20% of new customers. By this March, that number was up to 45%. Moreover, the proportion of customers from low-income backgrounds saw a seven-fold growth. Astonishing? Perhaps. But at Aegon Life, we like to call it just another day at the office, living out our passion for innovation.

Reality Check: Insurance for All

The vision of 'Insurance for all by 2047' isn't a far-fetched dream. It's not a pie in the sky. With the power of technology and a synergized ecosystem of life insurance players, insurtechs, fintechs, banks, NBFCs, edutechs, and healthtechs, we can bring this vision to life. Let's leverage our collective strengths and work towards a future where every Indian household finds financial security, a future that's just around the corner.