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BW Businessworld

Reimagining Business Models With Technology

The government’s initiative to push insurance across the country will help enhance reach and distribution

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The insurance industry in india is headed for interesting times. Up until recently, the insurance sector, largely a data driven one, was reliant on traditional channels like bancassurance partners, agents and brokers for product distribution. However, customers are increasingly being influenced by the digital experiences they acquire in other spectrums, which has a significant impact on their expectations.

In the face of a disaggregating value chain, incumbent insurance players must consider the competencies in which they need to invest to maintain their strong competitive position. It is difficult to deliver 2018 levels of customer service when you have got core legacy IT systems that are 30 years old. Thus, insurers and technological firms are now investing significantly in data analytics and mobile technologies to achieve improved risk insights and customer engagement models. Artificial intelligence (AI), chat bots, computer vision, machine learning and mobile apps are now commonplace, poised to alter the insurance universe.
Insurers are adopting a more proactive approach to seize the opportunities offered by insuretech. The modern customer shows greater affinity towards a chat-based interface as compared to telephonic or a face-to-face conversation. AI is streamlining simple claims and underwriting decisions, leaving experienced professionals free to work on more judgement based decisions. With an internet user base inching to reach 500 million by June, insuretech has driven the sector to expand product reach, streamline back end operations and improve accessibility.

While insuretech has successfully redefined customer servicing platforms, reach and accessibility of insurance products, the emergence of blockchain technology has presented the potential to disrupt the insurance sector by altering pertinent processes including data sharing, claims processing and fraud prevention. The blockchain model of tamper resistant, decentralised data, allows insurers to introduce new models and reinvent processes.

The aim is to reduce risk of data breach and fraud by creating a ledger with policy details which can be shared between insurers. This can be achieved, since blockchain provides a solution to enhance efficiency and security that would allow personal data to be controlled by an individual while verification is registered on the blockchain.

This technology simplifies two major issues faced by the customer and the insurer. The customer is faced with the difficulty of understanding the complicated application process, whereas the insurer faces an increase in fraudulent claims. The adoption of blockchain technology and smart contracts helps both parties benefit by managing claims in a responsive and transparent way. Blockchain has the potential to identify authentic claims and ensure that only the valid ones are paid.

As technology, innovation, customer expectations and disruptive entrants restructure the marketplace; insurers remain focused on growing topline sales, bottomline profitability, addressing challenges, and competing in a dynamic industry.

The government’s initiative to push insurance across the country will help enhance reach and distribution. This is of prime importance, since India lacks a social security module and insurance serves as the only buffer for customers during health and financial adversities.

Undoubtedly, we are staring at a whole new ball game with technology reimagining business models. As the industry goes forward into this brave new world, insurers that make digital transformation not just a priority, but a continuous improvement process, are most likely to reenergise their cultures as well as grow their top and bottom lines.

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.

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Magazine 28 April 2018 insurance anniversary special

Ashish K. Srivastava

The author is MD & CEO, PNB MetLife India Insurance

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