Digitalization and its imprint on the insurance industry
The insurance industry is undergoing a transformation today. Digitalization has opened up major opportunities for us. It has given a breakthrough to deal with the challenges that we have been battling for over decades. The advent of insurance business in India dates back to 1818. The industry has had its presence in the country for over 150 years, yet the penetration is less than 3 percent of the GDP. Conventional approach and lack of infrastructure has been the root cause of the industry’s inability to realize its full potential and penetrate the Indian market. However, today the industry is embracing digitalization and transforming the way business was done. It has affected all areas of operations of an insurer, including employees, customers and business partners.
A weak distribution network and inability to penetrate into tier 2 and 3 cities was one of the biggest challenges. Today, insurance transactions like policy issuance, renewal, claim intimation and processing or accessing any policy or insurance-related information can be done through mobile applications via tabs or smart phones. Employees and business partners armed with smart phones and cashless payment solutions are taking insurance to customers’ doorsteps. Bajaj Allianz with the help of this technology has been able to reach out to 300 new markets in the last one year.
Simple Products and Solutions Anytime Anywhere
Today, insurers are in the process of de-jargonizing products and simplifying underwriting processes. Considerable progress has been made when it comes to offering motor or travel insurance solutions to customers on an online or mobile platform. These products can be easily bought and renewed by the customer either online or via a device within a couple of minutes. Going forward, we will look at creating flexible products that fit customers’ needs and allow them to tailor the product according to their requirement easily on the go. For example, if a family is looking at a home insurance cover as protection against burglary, they could tailor the product to their requirement for a price that fits their budget, make a comparison on the benefits and make a purchase straightaway in few easy steps. The use of big data, proxies and risk engines has enabled insurers to deliver simple solutions. Today, motor claims are being settled via tablets, claims within the range of Rs. 30,000 are now being settled within 3 days.
Most importantly, digitalization has enabled the industry to provide customers with touch points that enable them to make a purchase or look for a solution on a real-time basis anywhere anytime. For instance,the Bajaj Allianz mobile application, Insurance Wallet empowers the customer to conduct all insurance transactions on real-time basis. The aim is to innovate on the entire customer experience and make it digital with no manual intervention.
Internet of Things and its implication on the Industry
The Internet of Things (IOT) opens up major opportunities for us. Internet connection in nearly every type of consumer device will result in huge implications for the insurance industry over the next couple of years. It will help us improve business practices and better assess clients’ risk levels. For example, integration with IOT devices like telematics in the car, health fitness trackers and internet based home security devices will help us provide usage-based insurance by tracking the client’s activity and subsequently offering discounts and rewards for healthy and safe behavior.
Social and Digital Media
Today, social media has enabled insurers to gauge customer sentiment directly and address their needs through products and solutions. It has also opened up a platform to share information pertaining to insurance seamlessly. This technology is giving insurers more and more mediums to influence retention by engaging with customers directly via platforms like Facebook, Twitter, YouTube or even Google Hangouts. In the future, digital media will help us further intensify our contact with customers and provide them with knowledge and services, when and where it is most relevant for them.
The future offers a bright prospect to the Indian insurance sector. Riding on the digital wave, insurers will harness the power of technology, social media tools, new e-payment models and distribution channels to reach out to more and more people across the country. This would help ensure that majority of our population has a financial safety net in the form of insurance, so that tomorrow if any unforeseeable crisis strikes, nobody has to sell their land, home or jewellery to make ends meet.