Implementing digital-led, customer-centric initiatives has spurred a new wave of innovation in the insurance sector
The Insurance Regulatory and Development Authority of India (IRDAI) in April notified the extension of its regulatory sandbox by two more years to ensure successful completion of the existing sandbox proposals and invite new applications that will further drive innovation in the insurance sector. The extension of the sandbox regulations, which were established to enable live testing of innovative insurance-based products/services in a controlled environment, comes as good news for both the insurer and the insured.
For the insurance provider, this sandbox approach allows them to freely experiment with technologies and bring new offerings to the market in a much lesser time. Customers, on the other hand, can benefit from having greater access to products that are easy-to-use, tailor-made and affordable.
Buoyed by technological advancements and the subsequent influx of tech-based products/services, India’s insurance sector has been undergoing a digital overhaul over the last few years. With the Covid-19 crisis further accelerating this transformation, the role of insuretech companies in facilitating innovation, enhancing customer experience and contributing to the overall growth of the sector is critical. As we delve further into the subject, let’s take a look at how insuretech companies are taking a customer-centric approach to redefining customer experience.
Increased Customisation and Innovation
Insurance companies and new age insurtechs now have the ability to utilise digital technologies to fuel innovation and offer increasingly customised solutions that are tailored to the unique requirements of their customers. In addition to analysing basic information such as health status, employment history, earnings, age, geographic location, they also leverage valuable insights from publicly available data sources and even the customer’s digital footprint across channels to build custom-made products/services, thereby providing a more personalised experience. The increased focus on consumer behaviour data has also provided insurance providers with an opportunity to drive effective product innovation.
Benefits Beyond the Traditional Coverage
If we take the example of healthcare insurance, traditional insurers offer schemes that only cover the hospitalisation costs and a few critical health events. Insuretech companies are trying to utilise data to take a more comprehensive approach and offer benefits that extend well beyond the hospitalisation costs. These benefits include regular health check-ups, diagnostics, disease management for lifestyle diseases, fitness packs, nutrition counselling sessions, and mental health management. With the advent of such holistic healthcare plans, customers can not only stay financially prepared for medical emergencies but also lead a healthier day-to-day life.
Enhanced Customer Service
Modern tech-based insurance service providers are creating a customer-first experience by using automation, data analytics and other digital services to meet the ever-evolving market expectations. Implementation of video-based KYC and e-KYC systems have eliminated the need for time-consuming in-mail documentation and paperwork, thereby facilitating a faster and easier onboarding journey for customers. The pandemic has also necessitated contactless onboarding, which was already witnessing widescale adoption led by insuretech companies. Additionally, insurance providers are deploying AI-based chatbots to offer 24/7 assistance and support to customers regarding any queries related to appointment bookings, subscription plans, claims, discounts, and the like. The round-the-clock support is proven to be especially beneficial for first-time insurance buyers who are not familiar with the complexities and jargons of the insurance sector.
Increased Insurance Penetration
The use of such technologies and innovative insurance policies will help in tackling India’s abysmally low insurance penetration challenge by bringing making the insurance offering more relevant and also attracting unserved/underserved sections of the population under the ambit of insurance coverage. Introduction of small-ticket, easy-to-comprehend and pocket-friendly products, are taking the benefits of insurance to the unserved/underserved sections of the society, including the rural population and marginalised communities. Effective use of digital platforms especially the mobile phone will enable companies to reach customers in the remotest parts of the country. Similarly, the availability of micro-insurance products has allowed people on low-income to enjoy the security of insurance without having to pay exorbitant charges.
Modernising the Underwriting Process for Eliminating Human Bias
The underwriting process in insurance involves analysing customer data as well as industry-specific data to understand the intent and risk of the insurance buyer. With tech-based insurance service providers deploying AI and ML-based tools, the underwriting process becomes automated and offers a more accurate risk assessment, leaving no scope for human bias. This enables an opportunity to address the pain points of insurance buyers and reshape the customer journey. By harnessing AI’s ability to analyse large volumes of data, these modern companies have also been able to fast-track the underwriting process significantly, which in turn has led to faster onboarding of customers. The ability of an insurance provider to also widen the scope of acceptance increases drastically.
Insuretech companies have been implementing digital-led, customer-centric initiatives to spur a new wave of innovation in the insurance sector. In doing so, they are not only providing an impetus to the industry’s growth but also facilitating a seamless, value-driven and impactful customer experience that transcends geographical as well as economical barriers to insurance inclusion.
The author is Co-founder and CPO, Vital
DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.