Insurance Sector Should Raise Tech Spend
Life insurance in India has become a booming business for the more than 20 companies in this sector. Though these companies have collectively invested Rs 58,000 crore in the equity market, adoption of technology in this segment is very low.
Globally, the insurance sector is using SOA, Web 2.0, and other Web service to cut costs. All the same, it also needs to move from legacy systems to SOA with agile and flexible core insurance processing systems in addition to technology deployment for better customer service. In India alone, the life insurance business is managed by nearly 30 lakh individual agents.
"We need to invest in technology for better customer service in the insurance industry. The industry is looking for a good business model, and investment in technology is crucial to reach masses," said Rajesh Relan, managing director of MetLife India Insurance Company. The life insurance penetration in India is around 4.75%, and the sector is looking for higher penetration in urban and rural markets.
LIC of India is investing nearly Rs 600 crore on electronic document management system (EDMS). The corporation is expected to transform more than 175 million policies into electronic format by 2010. However, the companies maintain their official Websites that have online options for insurance advice and premium calculation, but online policy administration is not feasible yet, and the consumers have to pay commission to the agents. Currently, India has Rs. 29 crore in policies, which is the largest in number than anywhere in the world.
Security concerns are top of the mind of any CIO in a BFSI sector. But the need of the hour is to embrace technology and execute projects faster. In this era of cut-throat competition, one has to remain at least two steps ahead of the rest, and proper use of technologies laced with perfect security solutions will enable just that.
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