Digital Enterprise

Power of Digital Will Drive Insurance in 2020 and Beyond


By Shanai Ghosh

Insurance has been among the last few industries to get on the “technology disruption” bandwagon. While we say that, we are observing that most industry players, old and new, are now adopting technology to enhance their processes and provide better customer service. I feel the Indian insurance landscape is ripe for digital transformation. We are seeing an accelerated pace of experimentation and adoption of emerging technologies among most players in the industry.

In the last few years technology has become all pervasive. We have seen multiple industry definitions and boundaries get redefined. Insurance is also undergoing a similar kind of disruption right now and we are seeing a rise in new business models, new ecosystem partnerships and an agile way for working.

Technology is no more seen as an enabler and is now driving the change in the industry. It has contributed immensely to the shift in consumer behaviour that we are seeing and has made a significant impact in reducing friction within processes in the insurance lifecycle.

Insurance in the context of India is even more susceptible to imminent transformation. The increasing internet penetration in the country continues to enable adoption of new age insurance business models. The base of digitally connected customer in India is growing rapidly. While distribution is among the first process areas to get impacted, we will see disruption in other areas of underwriting, policy creation and claims management as well. We will see reshaping of the landscape in the insurance domain in India as well. We have the youngest population in the world and the pace of digital technologies will accelerate now. Millennials are driving majority of shifts in consumption trends we are seeing now.

Digital holds the potential to transform the industry and enhance customer experience. It will facilitate cross-sell conversions across different customer segments. The upcoming product definitions will not be defined by socio-economic trends but rather by contextual needs of the target customers. The Indian consumer is evolving in a unique way with clear expectations of ease, convenience and trust. The coming years will see a step change in awareness and engagement around insurance in India. Technology will enable hassle-free experiences for customers who largely considered insurance and particularly claims management as a cumbersome process.

Key changes or trends we are witnessing are around new product and service innovation and use of new distribution channels. There is a stark shift from product-focused mentality to a customer experience–driven business model. What has been exciting are the very innovative business models and partnerships which have emerged over the last two years. Technology is enabling the entire service ecosystem to evolve and expand.

Additionally, operational efficiency has gone up manifold with the introduction of technology. It is now possible to tap into new data sources and use tech for a far more active risk selection and accurate risk quantification. A big opportunity lies in personalization and efficient use of analytics is making it happen. Be it an ecosystem of health of motor service providers, there will be integration of solution groups to provide comprehensive packages to customers. Ownership of customer relationship will be crucial for success. IoT enabled connected lifestyle is another adjacency we will see growing into a large business opportunity. App-enabled live-streamed-inspection, automated claims, paperless processes, AI-driven fraud detection etc are some of the initial steps we are seeing already.

Digital insurance will enable rise of new models like usage-based insurance, bite-size insurance etc. We will see de-jargonising of industry and simplification of processes using automation.  There will be more of straight-through processing and better use of new-age communication channels. AI/ML, Big data will be used extensively to build relevant products and offer convenience to customers.

Digital adoption will change channel and product economics in India going forward. Growth fundamentals remain solid for insurance. For players to stay relevant or win in the game, they will have to embrace the power of digital, leverage data to build customer behaviour led models and speak the language of their target segments. We have just scratched the surface of digital transformation. It is up to us to harness the power of change and define the future of insurance in India.

(The author is Chief Executive Officer of Edelweiss General Insurance, and the views expressed here are her own)

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