Digitisation has touched all industries, and the insurance sector is not far behind. We saw many changes after Covid, but it’s time to understand the next step in this journey now. Tapan Singhel, CEO and MD of Bajaj Allianz General Insurance, in an interview with Nidhi Sinha, Editor, Outlook Money, spoke about how digitalisation can enable the interchange of data to develop capabilities that can benefit customers and save millions of lives. Here are the edited excerpts from the interview.
Digitisation brings efficiency in many ways, from cutting down on paperwork to enabling video know your customer (KYC) and more. Not surprisingly, everyone is talking about the convenience it has brought in. What has been your experience so far?
Those are the easier parts of digitisation—cutting down paperwork, and reaching out faster to the customer via emails, among others. But let’s look at the bigger picture. When Covid happened, nobody knew how to handle that, whether it was doctors or hospitals, because there were no protocols in place for it. But at that time, insurance companies would have data flowing in which would show if something was going well and something was going wrong as the data was being rceived on real-time basis. If that data could have been used by the government or by the World Health Organisation (WHO), it would have fast-tracked learnings, which would have benefitted millions of people across the globe.
So, one, in an era of digitisation and data, in health especially, things can be solved at hyper speed. That is exciting. Two, during Covid, everyone had their own island of digitalisation—hospitals, the insurance industry. Even today, when cashless facility happens, hospitals get the data, then they send it to the insurance company, they would look at it and process it, and so on. Why can’t it be all plug and play? Why can’t it be on a real-time basis?
As an industry, we are putting up a platform on which all the hospitals and insurance companies will be plugged in, so that processes become seamless. From the customers’ perspective, they will just walk in and walk out, because everything gets paid on a real-time basis.
I think the real impact of digitalisation will be felt in the next couple of years—it will lead to saving many lives, having better protocols, and real-time seamless settlement of claims and more. The current impact is also good—it's paperless, you have access, it saves time, people can look at claims online, and they can also file claims online. But these are just the easier parts of digitalisation. The rest is the high-impact part.
During Covid, at some point, hospitals and insurers were not really on the same page. Can digitisation make a difference on that aspect?
I do not see it as not being on the same page. During Covid, at many places globally, claims did not get paid because Covid was not covered under insurance. But in India, most Covid-related claims got paid. The industry didn’t hesitate to pay around `30,000 crore in health claims.
The issue comes in if people try to exploit or benefit from a crisis. That’s wrong. Let’s say someone goes to a hospital and the treatment costs `10,000 or `20,000, but you are asked to pay `10 lakh for that. You can't do that. That is where the exploitation starts happening. Similarly, if a patient does not need a steroid injection, but still someone gives that because it gives more margin, it’s harmful for the patient.
But since the insurance industry has a huge set of data base and follows protocols, and has access to protocols recommended by the WHO and the government on the right way to do a treatment, it helps keep a balance when things are going wrong. This balance is very critical from the consumer’s perspective, as at that time the consumer feels lost as it is a matter of life and death and is ready to listen to anyone for solutions. At such times, you need to be cautious.
If you look at the claims paid at the time, the industry didn’t go to the government for sops or subsidies, and it paid the claims very gracefully.
Digitisation has opened the doors for customisation of products. Now, there’s intense competition with some new-age companies coming in with novel products. Where is the industry headed in this scenario?
I would expect thousands of more companies to come in. In India, there are only 60 companies compared to 6,000 in the US. There’s competition among 60, but I would be delighted if there were 1,000 more companies coming in. Competition is the fuel for excellence, so the more the merrier. Everybody then needs to push to do something good for the customers. Today, 60 companies are doing it, and tomorrow if 6,000 companies start doing it, customers are going to get the best—the best of innovations, the best of solutions, and the best of products.
I remember, in 2001, before private companies came in, the only distribution was through agencies. Today, you look at the distribution, the number of products, the number of lives covered, it's been a phenomenal shift.
What role do you think artificial intelligence or AI will play in the future?
These things are already there. We were the first to come out with telematics about 7-8 years ago. In India, technology is at the cutting edge. Quite a few thing we've done are the first in the world.
AI-ML or machine learning has huge potential. I mentioned about the huge data that insurers have. When you combine machine learning with data, I can promise you that millions of lives will be saved or would become better. That is how the insurance industry has to connect with the health industry. It has to be a collaborative effort to make a difference.
The normal use case of machine learning as you see today is that if the claims come in, it will scan the documents, it will figure out the protocols, the genuineness of the claims, fraud analytics, etc. Every good company would be utilising this. These show efficiency in processes, but high impact will be made once that data is used in fuguring out illnesses ahead and what is working or not working, and starts aiding in solving issues.
For instance, in cars today, telematics will tell you if the tyre pressure is going down or if there is a potential problem with the engine. As a person, you would want to know these things in advance so that you can do something about it. With all this happening, the world is getting into very exciting times. At the same time, all this has to be used well, with single-minded focus on making human lives better.
Claim settlement has always been a pain point. Do you think that digitisation can make the processes more efficient?
There is a perception that claims are a pain point. Publicly available regulatory data shows the insurance industry has the least grievances from customers, in the financial sector. Yet the perception is there.
I ask a lot of people about their experiences with claims. If someone has had a bad experience, I probe deeper to explain why the experience was bad. For example, if your health policy is new and there is a claim for diseases such as heart ailment or cancer, the industry starts thinking that the policy may have been taken after you became aware about the disease. This is not the way a policy works. If that happens, then everyone who falls ill will buy a policy, the policy will pay you, and that way the industry will close down tomorrow.
It only works when you buy a policy when you have no illnesses, and when something develops, it is paid for. If you have a policy which is more than 5-6 years old, from any company, I will be surprised if there is a problem with claims. I am sure that it will be smooth in maximum cases. As data shows, over 96-97 per cent of claims get paid smoothly, with no issues. But if you have a new policy and you have a claim, then the industry will start verifying if it is a genuine customer or it’s fraudulent, or if someone has taken a policy after the disease developed, and that is where the conflict starts coming in.
Digitisation will not change that, but will make the process simpler. That is why I always recommend people to take a policy when things are going good; like make friends when things are going well in life. Taking a policy when things go wrong will perhaps be too late.
We have seen a lot of changes in the urban areas, especially after Covid. But what about tier-II and tier-III cities? Insurance penetration may still be an issue there.
It's important to realise that the insurance industry and the government are now working together. The health policy for all introduced by the government takes health insurance across spectrums, cities and towns, reaching to everyone. Something like that also helps build infrastructure. It’s a `5 lakh basic cover and a huge segment of people get covered there. As the sum insured is good, you have good hospitals looking at opening their chains in tier-II and tier-III cities, which leads to flow of money. So, it’s always a positive cycle. As insurance penetration increases, more hospitals will have a good flow of business, and there will be more doctors coming in, which will increase the life span of the country as a whole.
Tier II and III regions are already reaching that level as penetration is increaing. Additionally, the regulator is working with the industry on Bima Vahak and Bima Vistaar, which will be at the Panchayat level.
While digitisation has many benefits, sometimes seniors may be unable to make full use of it because they may not be so savvy. How is the industry planning to deal with that?
That’s again a myth. In my family, my father and my younger daughter are the most savvy. When it comes to e-commerce or social media, I see seniors handling it very well. These are simple procedures. I don’t think we should undermine anyone.
However, the industry is also looking at providing a lot of support to seniors. We have a product in which we actually have a watch with an SOS button. So, you just have to press it, and we will call you. If the call doesn’t get picked up, we will send an ambulance over, pick you up, and get you treated. It can’t be simpler than the press of a button. So, as I said, we always keep looking at where the gaps are and try to plug them.