The Indian insurance industry is undergoing technological transformation. Technology in the insurance sector is changing the ecosystem not only in scaling up, but also in its fundamental aspects. The digital-first business model is the end result of firms leveraging data and technology more than ever before, assessing new business models and profits streams powered by new technology. For both the insurer and the insured, advanced insurance technology is now an integral part of the industry.
Today's consumers have extra complicated needs and are more informed and conscious of their preferences than ever before. They want customized offers and personalised communications that lead insurers to digitise their services and optimize all communications.
The business ecosystem is evolving with the rapid emergence of new technologies such as artificial intelligence (AI) and the Internet of Things (IoT), and established companies in the market are adopting strategies to enable their businesses to digitally transform. The application of any emerging technology is a top-down exercise for the industry, beginning from assessing new age technology adoption to changes in customer behaviour, the insurance company must lead the show and usher in the digital transformation.
The insurance industry in India has adapted to many developments, changes and trends such as:
Artificial Intelligence (AI): Consumers are continuously seeing for customised experiences, especially when buying for something as important as insurance. AI enables insurers to build these unique experiences in reaction to the high-speed demands of new consumers.
With AI, insurers can enhance claims processing cycles and essentially change the underwriting process. AI also assists insurers to access data faster and remove the human element, resulting in more accurate reporting over shorter time frames.
Machine learning: Machine learning can not only improve complaint handling; however, can automate it. When files are digital and accessible via the cloud, they can be examined using pre-programmed algorithms, enhancing processing speed and accuracy. This automatic review can be applied for policy administration and risk assessment.
In addition, advances in ML (Machine Learning) allow current operators to systematise progressively more complex tasks, in particular by responding to all forms of customer requests. Machine learning is gradually being used to identify fraud, process automatic small claims payments and provide self-service digital damage assessments.
Telematics: The capabilities of Telematics will remain to influence auto insurance. It is wearable technology for cars as utilized in insurance technology. Cars are outfitted with monitoring equipment that assist in measuring various parameters such as speed, location and accident data. This data is then verified and processed using analysis software which in turn establishes the policy premium. The use of telematics has numerous benefits for both insurers and policyholders. It promotes better driving behaviour that is directly proportional to lower damage costs for insurers. Additionally, it facilitates companies to better assist their customers and add proactivity in relationships.
Chatbots: According to some reports, by 2025, 95% of all consumer interactions will be powered by chatbots. Effective use of AI and machine learning permits chatbots to communicate transparently with customers, saving everyone’s time in an organisation. This further helps in decreasing costs for insurance companies. A bot can assist a customer go through a policy request or complaint process, while keeping human intervention only in complex cases.
IoT: Most consumers are eager to share supplementary personal information if it means saving money on their insurance policies and the Internet of Things (IoT) can computerize much of this data exchange. Insurers can use data from IoT devices, such as the numerous elements of smart homes and wearable technologies, to better regulate prices, alleviate risk and even avert losses. The IoT will offer other insurance technologies with first-hand data, improving risk assessment accuracy and giving policyholders more power to directly influence the pricing of their policies.
Technology as a constructive influence in the auto insurance industry: The future of insurance lies in the digitisation of processes, making them seamless for insurance agents and customers. The introduction of the IRDAI (Regulatory Sandbox) by the Insurance Regulatory and Development Authority specifies the government's vision to look into digitisation as the future of the sector. The regulation will generate an environment conducive to experimentation with insuretech solutions. Digitisation will also improve insurance penetrate in the semi-urban and rural segments of India over the next five years.