Only 4% of the Indian population is Insured! It’s an uphill task to capture the vast population in the insurance net. We bring an analysis report of the Insurtech industry and how are they making impossible things possible by leveraging the next-gen technology of AI and ML. This is a Konsult research report on the Insurance sector.
Innovation through new technologies is a key driver of change in the financial sector and this has led to immeasurable efficiency gains. The insurance sector is no exception to such developments, with possibilities of new methods of service provision as well as greater opportunities for data collection and fraud detection that can lead to better risk identification and mitigation measures, which are being referred to as “InsurTech”.
“InsurTech” is the term being used to describe the new technologies with the potential to bring innovation to the insurance sector and impact the regulatory practices of insurance markets. Insurers are adopting AI powered platforms to help agents market the right policy, and setting up virtual branches and processing motor vehicle claims based on photographs. Broadly speaking, they are using emerging technologies, including artificial intelligence, big data analytics and blockchain to transform IT systems. InsurTech, as compared to FinTech, is more often related to service improvements for individuals, as opposed to businesses.
Only 4% of India is insured, which means “there are plenty of opportunities to grow.” More than 98% of life insurance policies are still sold directly, a joint PwC-CII report has estimated. Distribution partners will need to use technology tools to fit into a digital future. In effect, a chunk of technology investment goes into improving agent experience. Insurers have developed systems to advise agents on products tailored for specific customers, depending on their history with the insurer and income band. Bajaj Allianz Life Insurance has a mobile app to hire agents.
The insurance sector in India is expected to grow to $150 billion by 2023. One of the factors boosting this growth is the increasing customer reach and technology plays a very important role in this. The insurance sector in India is now witnessing a rise in the number of players innovating with technology through differentiated offerings and business models but Some outlooks also predict the number of insurance employees will drop as a result of some of these evolutions.
Some of the trends that are seen in insurance sector are as follows-
1. Machine Learning – Most of the insurers have already implemented technology to provide high-quality multi-channel customer service at highly optimized cost. The insurers have now even started exploring and investing in machine learning and automation for all their business operations start from marketing and underwriting of the insurance products to claims processing, settlement and reimbursement.
2. Big data Analytics – There is nothing denying the fact that insurers in India are gifted with a treasure trove of data. The inflow of data starts with the very first step of targeting and acquisition of customers. With the introduction of new digital technologies in insurance sector as well, the scope and format of information has changed drastically. The data usually comes from new innovative sources, including wearable fitness devices that are connected to the IOT, telematics and social media. Making use of predictive modelling is going to be very helpful for the insurance sector.
3. Artificial Intelligence – Artificial Intelligence or AI has surely become the buzzword in the world of technology today and In the last few years, AI has eventually started seeping into the various aspects of the insurance sector, adding value to the different business processes. The market experts believe that the different applications of AI in the insurance industry will change the way insurers carry out their business operations.
4. Blockchain Technology – Blockchain – Distributed Ledger Technology, is one of the most powerful technology trends that will revolutionize the insurance industry in the year 2019. Some of the insurers have already started using Blockchain technology for client validation and identification of fraudulent activities like false claims and approvals. The transactions that are carried out using Blockchain platform are highly secure and remain traceable at each point.
5. Internet of Things – The biggest trend that will significantly impact the insurance industry in the year 2019 is Internet of Things, or IOT – all of the world’s connected devices. Combining insurance with IOT is all about connecting the insurance sector with consumers and their risks. The key advantage of IOT in insurance industry will be the inflow of maximum data which will enable the insurers to more effectively determine rates and provide customized services while keeping the assets of the consumers safe and secured.
Indian Insurance sector is already using technology to their advantage and are able to reduce the cost of distribution and servicing. The insurance sector is undergoing speedy transformation with digital and data analytics advancements. As the population in the country become more digitally savvy, multiple players are preparing to ride the emerging opportunity.
Conclusion – Indian insurers are developing new tools with innovative features to deliver the value their clients are seeking as customers today are seeking instant resolution. End-to-end solutions must be implemented in order to attract new customers and to use InsurTech to the fullest. The COVID-19 pandemic surely will increase the importance of insurance in the customers’ eyes and Indian insurance market will see a great growth in the coming time.
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Author: Bharat Choudhary