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Technology And Social Reform
The main purpose of life insurance companies should be to provide financial protection to the levels of the society where the loss of a breadwinner brings financial catastrophe
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The internet phenomenon coupled with the smartphone revolution has opened up a huge potential for digital based services in India. With smartphone users poised to cross 500 million and the expectation that the mobile data usage per smartphone would increase to five times by 2023, the market size for digitally enabled services is expanding exponentially. The power of these numbers has already been witnessed in the disruption across industries. A sustained stimulus has come from the government’s initiatives like Digital India, Aadhaar Unique Identification (UID) linkage to KYC, etc.
The insurance sector cannot be left far behind. Sometime back, best known digital innovation in life insurance was the development of web aggregators. Though, percentage-wise the online sales are believed to be only 2 per cent of the offline sales, their numbers have shown sky rocketing year-on-year growth. But the capabilities offered by digital are endless and deployed at every stage of insurance production and service. The insurance regulator is also allied with the need to evolve the industry. The industry has for long been plagued by the least “ease of purchase” processes as compared to other financial sectors. The regulator has taken note of the seriousness and extended support towards new products, channel innovations and process transformations.
The “mass market” customer segment is evolving rapidly with increase in income and educational levels and access to financial services. The growth in the Indian insurance sector, though phenomenal, has surprisingly not caught up with the overall growth in this segment. We need to place ourselves in the customer’s spot, understand his life journey and predict his needs.
The data sources and analytical technology that are needed to adapt our products and services to proactively meet the customer needs are already present. We need to adopt them before it is too late.
Considering the capabilities of search engines, e-commerce platforms and cutting edge fintech companies with their vast resources of customer data; a scenario similar to the ‘banks versus fintechs and e-wallets’ is probable for the insurance industry as well. The industry’s best bet would be to disrupt itself by discovering new markets, products and service solutions by bringing analytics and artificial intelligence driven innovation to every step of the value chain.
A lot of companies have already put in efforts and we witness innovative products and processes introduced regularly. The much talked about use of blockchain technology has the potential to disrupt the traditional approach towards core insurance processes such as underwriting and claims.
Digital technology has acted and will continue to act as a catalyst for propagation of customer centricity. Though the needs and service requirements of customers are diverging into smaller sub-segments requiring the design of diverse products and processes, there has been a strong concurrence in their need for best customer experiences.
Digital enables real-time communication and assimilation of customer sentiments. These capabilities will become more relevant as digital broadens its functionality and influence among customers.
The main purpose of life insurance companies should be to provide financial protection to the levels of the society where the loss of a breadwinner brings financial catastrophe. Technology, if used intelligently, can provide effective solutions to bridge this current protection gap and bring on a new social reform.
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.