The Indian insurance industry has witnessed a remarkable technological transformation in recent past. Today, most insurers use technology- driven methods to reduce and replace human effort in order to provide seamless digital experience to their customers.
With the availability of new technologies, the real task is to identify relevant technology advancements, which can deliver maximum value in a business domain. No doubt that millennials are early adopters of technology and prefer to transact via digital modes be it purchasing a product or accessing information on their policies. Insurers are constantly working on developing voice-immersive experience, wherein the customer can verbally place the service requests, further elevating the customers’ service experience.
Commenting on the technological advancement within the insurance industry, Sachin Goel, Chief Technology Officer, Tata AIA Life Insurance, said, “Technology and technical innovations are driving the growth and evolution of the insurance sector. The Internet of Things (IoT) advanced analytics, digital platforms, block-chain, artificial intelligence (AI) and big data are providing new ways to price and manage risk, engage with customers, reduce cost, improve efficiency and provide effective insurance solutions.”
The most vital reason behind technological advancement in the field of insurance is to ease customers’ experience. With advancement in technology, there is a possibility of conducting risk determination on an individual basis, rather than generalising based on demographics in the near future.
One of the major benefits is the cutting down of distance between a customer and the insurance provider. While only a few are willing to discuss their personal finance with financial advisor. Despite that a majority of people buy insurance under the influence of agents. Few years’ back the whole process of insurance was done manually where products were mostly sold by agents. However, now, those are things of the past.
Pointing out the transformation in insurance industry, Puneet Nanda, Deputy Managing Director, ICICI Prudential Life Insurance stated, “Technology has played a pivotal role in transforming the life insurance industry. Digital platforms have enabled instant gratification by conducting real-time know your customer (KYC) authentication, convey underwriting decisions on-the-spot and eliminate paperwork while on-boarding customers.”
Meanwhile, technology has also helped in reducing the time taken in buying an insurance product. At the same time, it has also enabled the customers to make the right choice according to their needs.
“The right use of technology for instance has demonstrably reduced customer on-boarding time, the time taken to underwrite and the time taken to issue policies. The use of predictive analytics has become an essential tool for companies that help identify risks and also streamline claims triage,” added Goel.
Before making any payments on claims, insurers always double-check the claim process. As a result, insurers end up spending a lot of time in making the final payment. The InsurTech, insurance technologies, solution enable customers to steer easily through the claim process. Most insurers have online claim processing options to handle the vast majority of cases and award instant payouts. This option builds trust between the insurers and the policyholders and increases the levels of customer satisfaction.
Another major reason behind the growth of InsurTech has been an increase in the millennial population. This generation grew up in a digital world, and they are more comfortable with new technologies than any other market segment. Millennials always look for a comfort angle in their services and insurers need to embrace this by offering tech-friendly features. Millennials spend more money than any other demographics on mobile phones, and insurance companies know that they need to meet their needs.
One of the most common technology used in insurance sector is chatbot. A chatbot is used by websites to allow conversation through audio or text methods. It’s an AI based programme. A technological advancement made especially with the new-age group in the mind. Apart from being hassle-free, it’s also cost-effective.
“AI-powered chatbots are the order of the day, they function as a 24x7 customer service touch-point. It is still early days for the use of AI, data analytics and machine learning. There is a distinct possibility that AI-powered chatbots will conduct need analysis, on-board customers as well as settle claims. Insurance companies are working on developing voice immersive experience, wherein the customer can verbally place the service requests, further elevating the customers’ service experience,” Nanda further said.
The technological advancement however comes with its own challenges. While the first step and various other steps in the right direction has already been taken, it is not the time to sit back and relax.
In order to continue making customers’ experience more fruitful, the insurance industry must continue to innovate. That would be imperative to improve the relationship between the policy holder and the insurer.
Further, advancements enabling digital engagement through lifestyle apps will not only be welcomed but would also bring the insurer closer to their customers. Insurance products require a lot of personal data and increasing transaction of insurance products through technology increases the vulnerability of such personal data. Insurer must adapt necessary technology and safeguards to protect policy holders’ data.
“In the last few years, we have invested a lot in analytics and data-driven underwriting. What we are able to do today is identify a consumer based on his application and provide him insurance coverage up to a very large sum without even asking him to go for medical tests. Depending upon the age of the customer and the channel used, the insurer is able to issue policies for a certain range without medical check-ups,” Goel pointed out.
“Video technologies along with face recognition can help minimise and even eliminate mis-selling instances. Cognitive capabilities are helping insurers streamline the issuance processes. Application programming interface are bringing ecosystem players closer, thereby allowing convenience for customers.”
As insurance industry looks to increase its cover and enhance ease of customers and policyholders, adoption, innovation and expansion of technology only seem to be a natural exercise. What it also indicates is that in the end the customer will be the real winner.
nirmala@outlookindia.com