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BW Businessworld

Digital, Blockchain To Drive Growth

Digital platforms and blockchain technology will be put to increasing use by insurers to drive efficiency and service customers seamlessly

Photo Credit : Shutterstock


Puneet Sikka (57), who runs his  own business, renewed his life insurance policy online in March. It took him about 10 minutes to renew the policy and he did it over a cup of tea with friends. Back in 2001, “it was a mammoth task” when Sikka bought his first insurance policy from a private player. “I remember how an agent came home with his senior at around 3 p.m. They  explained the benefits of insurance and  the amount that I needed to insure. I was also told how the agents would always be there to help with all my insurance-related problems. Needless to say I had a latent fear of buying a policy from a private company and not the government-owned LIC. The entire process took a few days and was cumbersome,” Sikka recalls. Today Sikka has multiple policies and he takes only a few minutes to renew the policies. “Life is simple.”

The New Dynamics Of Digital Push
As the level of awareness increases, more and more people are now open to buying insurance products. The tech-savvy financially prudent young Indian now prefers buying and renewing insurance policies which include life, health, motor, travel among others – online. About 50 per cent of the digitally active consumers in India refer to online modes at some stage of the insurance cycle to manage her portfolio.

“Several insurance firms have already brought sales on tab and smartphones while many others are developing tools for effective lifecycle management of the customer by providing instant solutions such as chat bots to resolve customer queries, paperless policy issuance,” says Ashish Vohra, ED and CEO of  Reliance Nippon Life.

Apart from the increased use of digital platform in the insurance industry, insiders say that blockchain will be the thrust in the future. Blockchain, a digital platform securing records of verified data, will improve efficiency, transparency and reduce frauds. Blockchain will also allow companies to access and update data and other related information. “We believe that innovation in insurance will continue in 2018 and with increased focus on condition management, blockchain technology, adoption of wearable and portable devices will become key in serving the customers,” says Sandeep Patel, MD & CEO, Cigna TTK Health Insurance.

Betting Big On India 
Despite low penetration and an under-developed market, insurance companies see a huge opportunity especially with a growing economy and population base. The recent push from the government and the Insurance Regulatory and Development Authority of India (IRDAI) has also come as a boon to the industry.

A joint study by Ficci and EY indicates that the penetration of insurance in India is still poor. Besides, “the complexity and variability across the country only make it more challenging for the insurance industry to ensure that appropriate products and distribution systems are in place to cater to each customer’s need.”

“The trust deficit, which existed between insurance companies and consumers, is gradually eroding with sound regulatory environment and policy design and people are realising the need to buy insurance products and this phenomenon is across the segment. In fact due to the government push, a large number of people categorised as economically weak, have health and life insurance policies today,” says State Bank of India Group’s chief economic adviser Soumya Kanti Ghosh.

On the policy front, the government has already increased foreign direct investment level to 49 per cent from 26 per cent, bringing much relief to the cash intensive sector. Companies, now, also have access to tap capital market to raise resources.

Innovation Is Key 
Interestingly, while consumers today, armed with a higher level of disposable income and awareness are more open to buying insurance products to secure their homes or any loss arising due to an earthquake or fire, hitherto considered “not very crucial”,  companies too are foraying into areas which were not served.

Innovation has become critical to survive and serve the discerning customer. For example, many companies are now looking to introduce insurance products for pets. Until now, only the government owned general insurance companies offered pet insurance for those dealing in animal husbandry. But with changing dynamics, many insurers are looking to launch products for domestic pets, targeted at people who come under the high income group. Similarly insurers are constantly looking to offer new value-added services as well as products.

As opportunities for insurance companies expand, more and more companies are also gearing up either to expand their operations or foray into newer segments, be it in the area of health, general or even re-insurance. Sample this: While ERGO Insurance Group is set to expand its presence in the life insurance segment with the Avantha Group in India, Reliance General Insurance is looking to launch a standalone health business.

As Ashish Mehrotra, MD & CEO, Max Bupa, says, the future is bright and exciting for insurers in India. “We can safely say that the insurance industry in India is set to be activity filled in the coming years. There is an immense opportunity for the players to grow,” he adds.

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Magazine 28 April 2018 anniversary special insurance