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IAI Actuarial Core Principles · Business Management · Business and consumer needs, the industry value chain and competitive forces

A Mumbai-based life insurer finds through surveys that salaried customers in their thirties say they want protection for their families but rarely buy cover, because they believe the process is slow and paperwork-heavy. Which action best addresses this unmet consumer need?

A fully digital application with instant underwriting for low-risk applicants is best, because customers want protection but are deterred by slow, paperwork-heavy processes. The action removes that specific barrier, whereas changes to sum assured, commission, entry age or brochures leave the friction untouched.

  1. ARaise the sum assured limits on existing term plans
  2. BIntroduce a fully digital application with instant underwriting for low-risk applicantsCorrect
  3. CIncrease commission paid to agents on savings plans
  4. DLower the maximum entry age on all products
  5. Publish a longer product brochure explaining policy terms

Explanation

The stated barrier is the slow, paper-heavy process, so simplifying and speeding it up directly addresses the need. Higher sums assured, commissions, entry age or longer brochures do not remove the friction customers describe, and a longer brochure may add to it.

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