IBEF: September 02, 2019
Insures were facing a problem as there was increase in house insurance claims due to destruction by floods in Kerala.
Reliance General Insurance decided to introduce a video conversation feature that was used in motor vehicle claims to quicken claims processing. This led to reducing the claim time from previously two weeks to only three days.
Insurers are adopting AI powered platforms to provide aid to the agents to follow right policy and setting up virtual branches and processing motor vehicle claims based on photographs.
Technologies like Artificial Intelligence, big data analytics and blockchain are used to transform the industry.
According to Mr. Rakesh Jain, CEO, Reliance General Insurance, "We took a blended approach and did a few home insurances claims on video on an experimental basis."
The company is making an investment of US$ 10-12 million each year to upgrade technology. It was amongst the first to assess motor vehicle claims through video chat two years ago. The company is processing around 55 per cent of the claims out of the 30,000 by using video.
As per Mr. Subram Natarajan, Chief Technology Officer, IBM India and South Asia, "Indian companies are realising that they are sitting on a lot of data and are looking at how to unlock it." IBM works with a number of insurance firms on outcome-based design, or creating products tailored to specific customer needs.
According to Mr. Natarajan, only 4 per cent of India is insured that means there is lot of space to grow. The insurance companies reach was only 1 per cent back in 2001 when private players were just permitted. It is still lowest as compared to the whole world.
According to a joint report of PwC-CII, more than 98 per cent of life insurance policies are still sold directly. Distribution partners need to use technology tools to fit into the digital future.
Insurers have launched mobile phone apps to make it easier to transact for customers. Companies are also moving towards paperless claims. This can be considered as first step towards digitalisation.
Changing the whole system is not easy, so the focus is on improving systems of engagement with customers.
Digit Insurance, a two-year-old insurer that focuses on creating smaller value products. It makes use of blockchain-based systems at the backend to speed up claims processing. It has reduced the time taken to service a mobile phone damage claim from about 25 days to few hours.
"Servicing smaller ticket sizes means it has to be a cost-effective and technology-driven solution," said Mr. Vijay Kumar, CEO, Digit. "From onboarding customers to servicing claims, we have heavily leveraged technology with minimal manual intervention."
Features like automatically initiating and processing trip delay claims within a few hours, would not have been possible a few years ago because the technology was simply not available.
The change in consumer behavior is also changing the financial inclusion and sachet-model financial products in the insurance industry,
According to Mr. Veeraj Thaploo, Chief Technology Officer, Blazeclan Technologies, "These financial products are targeted at the mass-market, focusing more on the mid- and low-income section.
Different e-commerce platforms are working with insurance companies to onboard sachet financial products on their platforms."
But there have been many challenges for the companies including the development of a high performance and scalable delivery model through technology. Thus, most firms are opting for Cloud-based solutions.
The traditional insurers have taken that into consideration and are attempting to keep pace.
Max Bupa Health Insurance recently tied up with fintech firm Mobikwik to tap into millennials and first-time buyers.
"Bite size insurance is an emerging trend, and with this too, we are working in line with changing needs of customers," said CEO Ashish Mehrotra.
Insurance companies require to streamline processes to make buying and usage of health insurance convenient to customers, and technology integration is key to do that.
"Emerging technology solutions have huge potential and can bring a significant shift in the health insurance industry in the coming years," Mehrotra said.
The company has tied up with healthcare startup GOQii to keep track of health score of customers, and according to that the discounts on health insurance premiums is provided.
However, insurers agree that there is still a lot of scoped to do more.
"To be able to do all home insurance claims online, companies would need to invest to build a complete architecture of homes in the backend for a seamless front-end experience," said Jain of Reliance General Insurance. "There is potential to extrapolate work done in one area to other offerings."
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.