Technology to drive insurance distribution

Customers have started expecting the same quality and speed from all service providers, including insurance


In the past half a decade or so, powered by the increasing penetration of internet and smartphones, technology companies are dramatically disrupting industry after industry. Customers have started expecting the same quality and speed from all service providers, including insurance. Here are the three major developments that have compelled insurers to bring in fresh focus on technology:

Advent of on-demand marketplaces: On-demand technology platforms are vigorously building service infrastructure, optimizing operations, logistics and technology; and customers want similar levels of technology-led service experience from other services as well.

Rise of the millennials: Internet being a given to the millennials, research studies have proven that these high-income individuals strongly prefer platforms that allow them to interact at their own pace. But digital platforms of most insurers today are designed to cater to conventional consumers, and are still reliant on toll-free call centres to provide sales and customer service.

Pressure on margins: With constant pressure on margins, most insurers look at technology to bring in automation and drive operating efficiencies.

Given this compelling need, the insurance industry will play catchup in 2017 by using technology as the focal point to change the way they market, interact and service.

1. Analytics driven, personalized pricing: The insurance industry will be one of the primary beneficiaries from the growth of Internet of Things (IoT), telematics, wearable tech, all of which are set to become affordable and popular. Insurers are integrating with IoT-based businesses to gain access to intelligent data about their customers. This data will empower them to categorize consumers into segments and provide them personalized and dynamic pricing. For example, customers who are proven safe drivers, or take good care of their health, will be given additional discounts vis-à-vis other customers.

2. Outpatient health insurance products: All these years, thanks to the fragmented outpatient health care industry, insurers have struggled to launch health insurance products that offer coverage beyond hospitalization expenses. Insurers are working on various models that will leverage the growing smartphone penetration in India to create a viable and comprehensive health care insurance product. App-based consumption can also help steer consumers to curated network clinics, ensuring seamless, cashless, and paperless claims.

3. Focus on e-commerce based sale: The digital businesses in India in the current shape and form depend too much on contact centres for conversions. Brands today are spending significant marketing money to attract relevant traffic to their portals, and then they spend again to drive conversions. The current online purchase journey, the proposal form, and the questions are a near-exact replica of the offline journey. However, it’s a known fact worldwide that consumers have widely different expectations offline than when they are online. Insurers will have to build mobile-first purchase journeys with smarter proposal forms, which are integrated with data platforms (Aadhaar, income tax, and health care platforms, for example).  Being cost-effective, pure digital distribution will open up a new ‘sachet’ category of low-ticket insurance products. While these will have high demand, they may not be viable for distribution through the traditional agency channels.

4. Post-payment experience: We have noticed that the maximum grievances and complaints in insurance are post-payment. Once payment is made, expectations of quick service rise significantly. Insurers, and intermediaries, are working on the following:

• Robo-underwriting: Insurers will further their investments on artificial intelligence to bring in deep efficiencies in underwriting as a function. For instance, machine reading and learning will ensure that medical test reports for proposals are instantly read, digitized and exceptions auto-flagged to the underwriter. This will reduce the turnaround time for the underwriting verdict after medical checks from the current average of 1 week to 1 day.

• KYC documentation: Integrations available with Unique Identification Authority of India will ensure instant check of Know Your Customer (KYC) documents. Insurance products that require mandatory KYC documentation will replace their existing KYC processes with instant Aadhaar authentication.

• Advent of chatbots: Customers will be provided round-the-clock support using chatbots. Through online customer accounts, customers will be able to make changes in their policy, increase or decrease coverages, make renewal payments, and request cancellations, completely replacing paperwork in these post-sale services.

• Improved claims experience: Insurers are already using apps to improve customer experience. In 2017, we will see further improvement in claims experience, while continuous control over fraudulent claims also improves.

Apart from providing claim status updates on their apps, insurers are increasingly empowering consumers to pre-inform about a cashless claim on their app, so that there is faster admission in network hospitals.  Insurers will also introduce paperless reimbursement claims.

• Premium collection: The recently launched Unified Payments Interface (UPI) will open up innovative premium collection models. For instance, insurers will be able to use UPI—it works both on smartphones and regular phones—to send renewal payment requests through text messages. Customers can simply click on the message received, tap a few buttons and make an instant renewal payment.


[Copyright by Mahavir Chopra]