Changing Behaviour and Risk in Insurance

Changing Behaviour and Risk in Insurance
The pandemic has spurred insurance companies to have a much broader view of 'threats' and to sensitise themselves to the changing lifestyle of customers.

Tapan Singhel, MD & CEO Bajaj Allianz General Insurance, began his career with the New India Assurance Company Ltd. He has been working with Bajaj Allianz since its inception in 2001 and has been involved in various international projects.  He has to his credit multiple accolades, including the ‘India's Most Trusted CEO’ award by WCRC Leaders Asia in 2017 and 2018 and the 2019 ‘Personality of the Year’ by the Asia Insurance Industry Awards. He was a distinguished speaker at the 10th Synergia Foundation webinar on the 'Reimagining industry in an asymmetric, post-COVID' where he talked about consumer behaviour and risk-taking in the wake of the pandemic.

As the lockdown gradually eases in different parts of the world, businesses and organisations are slowly and unsteadily struggling to reach pre-COVID levels of economic activity.  In the face of the dire financial landscape, and perhaps tragedies due to deaths from the virus, people are now looking to insurance companies to make good their promises. Both industries and consumer behaviour have been altered by the economic meltdown, and insurance companies are faced with new challenges.  Insurance coverage will entail a fresh outlook in evaluating and mitigating risk and making informed decisions in order to meet the aspirations of their policyholders. 


The pandemic has fundamentally changed the way the world works, in just a few months, including how people live and think. The changes in lifestyle and habits have long-term implications for the market and industries. Instead of brooding on the negative ramifications of the pandemic, Mr. Singhel views it through the prism of endless possibilities and opportunities for change and growth. “In Wuhan, I think the sale of private vehicles went up after the lockdown eased. People want to use private vehicles; nobody wants to use public transport anymore,” he says. China is home to the world’s biggest car market, which was paralysed by the pandemic-induced economic freeze. According to the China Automobile Dealers' Association, about 99% of China’s auto showrooms were back in business as of April 3, and consumer traffic was back at about 66% of normal levels. Anecdotal evidence points towards safety concerns driving this renewed interest in private car purchases, as public transport is no longer considered safe.

Consumer preferences across the world are being transformed. Transactions have moved online, with people increasingly relying on online services for financial transactions and essentials. Non-essentials/luxury products have taken a hit as customers remain obsessed with COVID-related essentials — hygiene, sanitation, cleaning, and staples. People are once again buying local, patronising small corner shops as a matter of routine. Understanding this shift in consumer behaviour, the market has to be sensitive to their emotions in these trying times, “going that extra mile to be with them [customers]”.


With crises and natural calamities turning out to be regular occurrences, insurance covers are becoming increasingly important. It also calls for individuals as well as businesses to reassess their risk exposure, to better protect themselves against unforeseen losses and financial distress in the future. But, do individuals and businesses invest in insurance covers in the wake of disasters? Based on previous experience, Mr. Singhel was of the view that people generally consider insurance to be a cost rather than an investment.

"The human brain is not wired to see risk; otherwise, we would be staying in,” he added. Recalling his experiences post the 2015 Chennai floods, Mr. Singhel said the conversation about insurance takes place while a disaster, natural or otherwise, is already taking place, and there is a dip in interest as soon as normalcy is restored. However, there could be a shift in attitudes with the COVID-19 crisis as the damage caused has been rather drawn out, with immense losses and prolonged distress.

Today, the world is interconnected like never before, with events crossing the oceans at an unparalleled pace. Industries have moved online, employees are working from home, and the majority of work is being done remotely. With these changes, new risk factors come into play, like cybersecurity. 

With the dependence on digital platforms, there has been a spike in cybersecurity threats, with a reported rise in phishing attacks, malspams, and ransomware attacks. These threats are prompting insurance companies to match their pace with evolving risks. Organisations are in the process of reviewing their cyber risk management measures, remote work processes, and downsizing to save costs.

On the brighter side, the massive changes taking place now could be great opportunities to transform industries to become more resilient in the future and emerge stronger than ever before. 


  • Industries could use their experiences from the COVID-19 crisis to evolve for the better, by studying altered consumer preferences and purchase patterns. Online marketing of insurance will grow in importance as customers will increasingly prefer online channels to enquire, assess, interact, and buy insurance, just like other necessities of life. Insurance providers will have to upgrade their systems to meet consumer preferences and invest in state-of-the art digital capabilities.

  • Innovation is the route to survival in the new realities.  Insurance companies have to play on fears of pandemics that are here to stay, by encouraging individuals and businesses to invest in pandemic covers and business interruption (BI) covers.

  • Corporate boards and risk management teams need to keep reviewing external as well as internal risks to stay a step ahead and be prepared for potential and unannounced risks.