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How Insurtech will Influence The General Insurance Business
It also offers great opportunities for third party service providers, technology vendors and financial platform developers to come up with more and more insurance industry-specific technologies
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Technology is driving changes in almost all major business verticals in India be it FinTech, HealthTech, EdTech AgriTech or Insurtech. Adoption of technology for any industry is no longer an option, but has become a necessity. Anyone who doesn't embrace this change is going to be left behind, as technology is re-moulding the fundamental way of doing business.
InsurTech in particular is a hot topic of discussion right now, owing to both - the vast capital infusion in recent months, and also the growth opportunities it represents.
It's easy to get bogged down by the various forms of tech that are attacking the insurance space - Internet of Things (IoT), Telematics, Blockchain, Smart Contracts and Artificial Intelligence (AI), Machine Learning (ML), etc. The possibilities these new advancements represent, are endless, and it's important to pick and prioritize .
I believe the following areas will see the most impact - Micro Insurance
The insurance industry is seeing more innovative Micro Insurance products coming up, which were simply not possible to execute before. To name a few - ICICI Lombard insuring Ola rides at 1 rupee which is valid just for the duration of the ride. Or GoDigit's partnership with Cleartrip on simplifying claims for flight delays.
Innovations and Discounts on Existing Products
IoT has a big role to play here. Wearables like Fitbit and apps like Wysa who promote fitness can partner with insurance firms to create discounted products. Devices that monitor driving patterns can tie up to create discounted motor insurance for safe drivers.
Easier Buying and Claims Process
Video based self-inspection has made it easy to renew expired car insurance. Apps like RenewBuy and our own venture - Coverdrive, are digitising insurance selling at point of sales. Most insurance aggregators and companies are working towards providing a wallet of sorts to keep all insurance policies in one place where you can file for a claim or an endorsement in just one click.
Lower Operational Costs
" Fraud detection and better Underwriting - Data Mining Tools and Qualitative Analysis of proposals can help insurers in reducing their underwriting costs while at the same time Data Analytics can be applied to detect fraud.
Fraud detection in insurance is going to see a massive disruption in coming years.. A technology framework which can tap into advanced automation and analytics can help the insurer take steps to prevent it. We can now see protection-based models shifting to more sophisticated preventive models which will help facilitate loss mitigation in all the insurance segments.
" Reducing human intervention - AI ChatBots and VoiceBots are already competing to reduce / eliminate call-centre driven selling. IOT can help with the information that is required to asses a person's health to check the eligibility for insurance products. This will help to reduce manpower and operational costs involved in conducting the medical tests for Health and Life insurance policies. Blockchain also presents a great use case to reduce manpower required to investigate and settle claims.
Implementation of Insurtech has already helped insurers get themselves digitally transformed and offers choice, convenience, security and the ability of comparison to the masses. Even the customers are also increasingly adopting and accepting the Insurtech technologies in their day to day life, empowering themselves with the power of ease and mobility.
It also offers great opportunities for third party service providers, technology vendors and financial platform developers to come up with more and more insurance industry-specific technologies. Insurers need to put Insurtech at the heart of their strategy, if they wish to be the front-runners in the new insurance era.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.