Phygital Insurance: Blending Human Touch with Digital Speed for Better Customer Outcomes
By Aftab Alvi, Executive Director & Chief Marketing Officer, Shriram General Insurance
Fusion is always beautiful! It takes what is different and turns it into something extraordinary. When cultures meet, new traditions are born. When ideas blend, innovation emerges. When people unite, progress happens.
Phygital is also fusion – a fusion of Physical and Digital.
We never heard this word in our childhood. First used around 2007 in retail and marketing, “phygital” gained importance as the internet became more prevalent. After the Covid-19 pandemic, it went mainstream as businesses were forced to blend online and offline to survive. Hybrid events, digital shopping with physical delivery – all became part of this phygital world. Insurance too stepped into this space in a big way.
For a long time, insurance was considered a traditional, paperwork-heavy, face-to-face consultation industry. But now, companies are blending human touch with digital convenience to transform the customer journey.
India today has over 900 million internet users. In July 2025 alone, 19.47 billion UPI transactions worth ₹25.08 lakh crore were processed. According to a Press Information Bureau report (May 2025), 85.5% of households have at least one smartphone, and 86.3% have internet access at home. Clearly, the digital revolution is reshaping our day to day life.
But the question that arises is, how are insurers maintaining the human touch while providing digital options?
Insurance penetration in India remains very low at 3.7% of GDP in FY’24 (life + non-life combined). Insurance must be an informed decision and not the outcome of pushed sales. Despite digital reach, the human connection is still essential, and the insurers retain it through the following ways:
1. Personalised Experience
AI chatbots – often given friendly Indian names like Geeta or Rashi – are designed to use empathetic language. But when queries become emotional or complex, they quickly transfer the customer to a human advisor. Similarly, during claims, digital tools may start the process, but human claim managers step in to offer assurance.
2. Hybrid Claims
Customers upload documents, photos, and track claims online. But a surveyor or claims officer still connects personally to guide them, ensuring empathy during a stressful time.
3. Physical Presence
Even with digital platforms and centralised systems, insurers continue to maintain a nationwide presence through branches, call centres, and field staff who goes to the customer’s place to connect in a phygital way.
4. Human Guidance through Digital Channels
Insurers increasingly use video calls and WhatsApp chats to explain policies instead of sending a payment link alone – a financial advisor ensures the customer feels guided and reassured, even via a digital medium.
Every now and then, we hear that AI will replace humans. But when we take a closer look at the customer experience aspect in a trust-based industry like insurance, the story is different.
Digital tools are excellent for calculations, data processing, and speed. But they cannot replace the comfort of a reassuring voice in moments of crisis / loss. For example, when floods hit Uttarakhand or when a massive fire engulfed a textile market in Surat, customers filed claims digitally – but the support of a claims manager made the real difference in quickly settling their claims and ensuring continuity.
AI will continue to evolve, and digital will keep growing stronger. Yet the winning formula is not choosing between physical and digital but blending them harmoniously. That is the essence of Phygital Insurance – digital with a human touch.