Digitization Picks Up The Pace In Insurance
Digitization has changed over the traditional approach of an agent-driven model to a more seamless and effective digital transformation that ensured utmost customer satisfaction
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Digitization has already brought up substantial transformation in many industries; however, similar transformations have also been seen in the Insurance Industry since the past few years. Though this kind of transformation has arrived a little late but yet it has to exploit the full potential of digital technologies. The inclusion of Digitization into the insurance process has brought a number of valuable changes such as improved customer experience, value creation of the industry, seamless business processes handling, risk handling along with the introduction of unique plans and addition of new features in the existing plans.
Due to the Digitization, there are several recent advances in the Insurance Industry that have increased and developed an extreme interest among individuals across India to invest in various Insurance Policies. Adding to this, the Government's mission of insuring the uninsured and proliferation of different insurance schemes has gradually pushed insurance penetration in the country.
According to the Indian Brand Equity Federation (IBEF), it is expected that the Indian Insurance Industry will grow up to $280 billion by FY-2020, driven by the launch of new and innovative products, increasing awareness and comparatively more distribution channels.
In 2017, the overall insurance penetration in India reached up to 3.69%, although higher than the 2.71% (penetration ratio back in 2001). This small number does go on to reflect the breadth and depth of opportunities that are still available to online platforms like Probus Insurance, which utilize new and non-traditional means of reaching clients remotely.Also, in FY19 (up to October 2018), premium from new life insurance business increased 3.66% year-on-year to Rs 1.09 lakh crore. In FY19 (up to October 2018), gross direct premiums of non-life insurers reached Rs 962.05 lakh crore, showing a year-on-year growth rate of 12.40% which again is a motivating factor to adapt the digital change.
Digitization has changed over the traditional approach of an agent-driven model to a more seamless and effective digital transformation that ensured utmost customer satisfaction. It is a win-win situation for both insurers and customers since the customers are enjoying an enhanced experience and the insurers can now leverage low-cost digital distribution channels for both services and sales which will ultimately deepen their market penetration. Also, there are other factors that are accelerating the growth of the Insurance Industry.
Introduction of the Online Insurance Platform
With the insurers going digital with their products and services, the intervention of agents has cut down to a larger extent. Now, if a working person has to buy policy he or she need not stand in long queues or take out time to meet an agent to buy or renew a policy, this could be now done easily through the various online portal of the insurers or through their company apps that ensures all such processes at just a single click making the process easy and time saving. Moreover, the insurers save on money since they need not pay any agent commission, so again it is a perk to both insurer and customer.
Enhancing customer communication
The introduction of Chatbot which combines Artificial Intelligence (AI) with Machine Learning and Analytics has been a vital part to enhance customer communication. This Chatbot - Digitization of Human Communication ensures 24x7 services and helps you understand a wide range of products.
Easy and quick Claim Settlement
Now it is possible for one to initiate the claims digitally by filling the claim settlement form online, attaching the relevant document and sending it within seconds to your insurer owing to the Digital move.
Bring Down Mis-Selling
Reviews and features of a product help you to understand what you actually need or not and lessens the chances of you being mis-sold. You can even talk to experts or mail your queries for an unbiased opinion through the digital medium.
Digitization can prove to be a game changer for the insurance sector. According to a BCG survey, by the year 2020, there will be a growth in the digital insurance 2,000% from its current state with a total turnover of Rs. 15,000 crore. In addition to this, it is also estimated that in the next coming two-three years, 75% of insurance purchase decisions will be powered by Digital Channels. Insurers need to constantly reinvent themselves and develop a data first mindset to make the most of this rapidly evolving ecosystem.
Also, the rising awareness of the need for protection and retirement planning through the Digital medium will hold up the growth of Indian Insurance. Innovation in the Insurance Industry will fuel the demand for plans and would be a key driver for the Insurance Market.