"Insurers must adapt to new-age customers' needs, leverage on the explosion of data and digital footprint and the changing investment environment," the Confederation of Indian Industry (CII) said in a release here.
"Mobile adoption and internet trends under Digital India banner are bringing in a new generation of customers who are conversant and comfortable with using technology for their financial decisions.
"It is important to adapt to strategies that align with these changing trends to stay ahead of the competition," it added.
Leveraging low-cost digital distribution channels for sales and service is likely to play a significant role in helping insurance companies deepen market penetration, the report said.
Moreover, simplification of processes will also lead to some degree of uniformity in the expectations of customers.
"There needs be a simplification of products in the areas of policy benefit, the wording of the policy, application process and the claim process," CII said.
"The insurers could focus on 'One Need One Product' scenario, where customers are provided simplified products that cater to their specific needs," it added.
The report also said that with digitalisation, insurance companies should be wary of new methods of fraud.
It stresses on three key areas relevant to the insurance sector — simple products and low-cost distribution, digitisation and fraud management, and broadening the investment horizon.