There is no path more hazardous than the one taken in attempting to predict what the future entails. Supporting the statement is a recent report that states with a population of over 1.33 crore, the country’s life insurance penetration rate is even less than 3% of the entire GDP. In the last few years, one important thing that has not changed all this while is the ‘perception’ of people towards the product.
As per industry experts, life insurance in India is still seen as a product that comes into play only when something goes wrong with its primary focus on the mortality aspect. This is a key reason why families are not fully protected against unseen circumstances caused by the death of the breadwinner.
However, with digitalisation at its peak, it’s time for the life insurance industry to make dedicated efforts towards increasing life insurance awareness amongst the people. The word ‘Digital’ today is one of the largest trends that are shaping, disrupting and transforming many industries. Given that the world we live in is in continuous flux and every industry faces transitions, this is truer today than ever before. As with every other industry, the life insurance industry is becoming more technologically advanced by the day.
Higher personalization levels in premiums is an emerging trend that is scheduled for a long stay in the insurance industry. In fact, customers prefer personalized insurance covers instead of the one-size-fits-all products currently available.
Thanks to new-age analytics, insurance companies are constantly collecting data to make services better for their consumers. For instance, they have surveys and questionnaires for their customers to figure out ways to improve their service. Also, to be able to supply their customers with the personalization they want, companies in the insurance domain are in need of behavioural insight to develop a deeper view of their customers. As a result, it will lead to more accurate risk assessments, personalized premiums and value on a sustainable basis for better customer experience and brand loyalty, plus reduced false claims.
The digital economy will make usage-based, on-demand and 'all-in-one' insurance lifestyle products more relevant. This will help insurers to reach out to their customers for new followed by alerts to give the best customer engagement possible.
The first area in the insurance industry, which the blockchain technology could have a lasting effect on, is underwriting. As personal lines insurers expand globally, aging underwriting resources in the developed world and lack of underwriting skills in emerging markets will lead to a severe talent shortage. The need for huge volumes of customer data to be processed in real-time by different insurance functions calls for easy and secure transfer of data across organizations.
As a result, life insurers, increasingly are turning to analytics and AI to generate insights from vast amounts of data to improve underwriting accuracy and speed. It is one of the most powerful technology trends to revolutionize the insurance industry in the next couple of years. Blockchain technology provides the advantage of secure data management across multiple interfaces and stakeholders without loss of integrity. From identity management and underwriting to claims processing, fraud management, and reliable data availability, the technology offers reduced operational costs.
Another aspect of the insurance industry that can be positively affected by blockchain technology is the processing of claims. Considering the number of data points that need to be verified and the manual effort required, it’s no surprise that the users find the process too long and tedious.By using blockchain all the necessary information needed for claims verification can quickly be processed. Companies from the insurance domain can track the usage of an asset by using the data available in the blockchain without tampering any information. This will become mainstream in both the front and back-office to automate policy servicing and claims management for faster and more personalized customer service.
There is nothing denying the fact that technology was a big win for the insurance sector not only in India but globally in the year 2018. A recent report states that technologies like Chat-bot and Wearables are expected to grow exponentially in the next few years. Life insurers are launching digital-only products to speed up the quote-to-issue process and bring in cost efficiencies in customer service. As with new technological advances: Internet of Things including wearables and telematics devices, Artificial Intelligence (AI) including chatbots and machine learning, and Robotics will significantly increase automation leading to greater productivity. Many insurers will also take this as an opportunity to incentivize policyholders for living a healthy lifestyle.
This can assist consumers to look for life insurance products that are convenient to buy. Meanwhile, new players and insurers can plan to align better with emerging business environments, managing changing customer preferences and improve operational efficiencies. This would breathe new life into policies and leverage emerging technologies (artificial intelligence (AI), analytics, and blockchain) to improve efficiency, agility, flexibility, and customer-centricity.
(The author is Chief Business Officer- Life Insurance, Policybazaar.com.The views in the above article are the personal views of the author and do not reflect the views DNA)