Insurers must adapt to New-age customers' needs, leverage on the explosion of data and digital footprint and the changing investment environment.
The CII - PWC report, titled 'Evolving Considerations for the Indian Insurance Industry' discusses three key areas relevant to the current insurance sector - Simple Products and Low Cost Distribution, Digitization and Fraud Management and Broadening Investment Horizon.
Eco system for insurance in India is rapidly changing. Government of India initiatives such as demonetization, introduction of UPI, India Stack are accelerating the adoption of digital technologies. The Insurance Regulatory & Development Authority of India (IRDAI) is heralding change through its e-insurance initiative and financial literacy programs. 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 competition.
Some of the ways of achieving transformation in Indian Insurance Sector can be illustrated as follows. There needs be a simplification of products in the areas of policy benefit, wording of policy, application process and the claim process. The insurers could focus on 'One Need One Product' scenario, where customers are provided simplified products that cater to their specific needs. Big Data technologies needs to be leveraged to enable augmentation of the traditional data with images, text, voice and IOT (telematics, wearables and drones). The Intelligence techniques could be encouraged which include machine learning from past experience and improve their prediction of fraud over time. The modern investment choices like private equity, property, derivative and digital for higher returns in the current low interest rate environment could be explored. Asset liability management that use qualitative and quantitative portfolio optimisation techniques can be leveraged to drive effective investment strategies.
Mr Chandrajit Banerjee, Director General, CII said, The Insurance Industry is at the threshold of a long period of growth. With the rapid change in technology and digitisation, the drivers of insurance business are changing. Those insurers who disrupt themselves continuously would be the ones who will succeed in the long run. All stakeholders - the industry, intermediaries, government and regulator need to work together in transforming customer experience.
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