Insurance and Technology, more popularly known as InsurTech has become a buzz word in the non-life insurance sector on account of the growing stature of technology on various business practices/decisions of the companies forming a part of the sector.
The General Insurance industry has grown at a CAGR of approximately 17% over the last two decades & the industry is expected to continue its commendable growth trajectory in years to come.
Demographic factors such as growing Indian middle class, the young insurable population and the growing awareness with respect to the need for protection through insurance, is very likely to support the growth of Indian general insurance.
India is the 4th largest insurance market in Asia and the 15th largest globally as per the Sigma 4/2020 Swiss Re report. India is a significantly underpenetrated market with the premium as a percentage to the GDP being a meagre 0.97%. From a non-life insurance density perspective, the per capital premium is a meagre $19, when compared with USA which stands at $2,672.
The growth outlook for the general insurance sector continues to be positive with the growth expectation being pegged at 2 to 2.5 times the GDP growth.
This presents tremendous opportunities to grow, capitalize on the market conditions and make non-life insurance into a preferred product segment for the end consumers.
Fintech innovations have become the order of the day and the non-life insurance companies which nudge ahead on technological strength and initiatives are likely to have a larger market share and would continue to deliver superior customer centric solutions.
Technological initiatives have played a pivotal role in advising customers on loss prevention and risk management exercises. The focus of the non-life insurance sector has been to move the insurance related discussion away from price and institute Value Added Services (VAS) for customers – whereby we discuss events or incidents which can lead to losses for the customer and discuss measures which can be instituted to minimize the occurrence of those incidents. Accordingly, the extent of loss is significantly minimized on several occasions and the insurance premium price the customer is offered at the time of renewal is superior and there is continuity of insurance with a specific insurance company.
To give an example, during the insurance renewal process for solar plants and wind mills, drones are utilized to fly above the panels in case of solar plants, get an imagery of the panels and accordingly detect defects, if any, on a proactive basis. In case of wind mills, drones help to detect cracks, if any, in the blades of a wind mill and accordingly help customers and companies in avoiding a total loss scenario.
To quote another example of effective loss prevention exercises, in marine transit, if a shipment has to move from say point a to point b, wherein typically the cause of loss has been identified as pilferage or hijack en route the transit- through VAS the companies can institute a process wherein GPS trackers are installed such that triggers get flagged as and when the vehicle has taken a de-tour and in the process the number of hijacks are likely to get reduced.
The non-life insurance industry has played a key role in ensuring robust growth for businesses through protection of assets and indemnification for losses arising out of business interruptions, thereby ensuring sustained economic growth as well.
In the healthcare space too, there has been a paradigm shift in the focus to new age wellness solutions and the endeavours of the non-life insurance sector are aimed at having a customer centric strategy through adding value to the customers in terms of devising covers which promote fitness and good health.
At the end of the day, the happiest individuals are those who are the healthiest as well and health insurance has transcended boundaries to move from indemnification to wellness solutions.
Through path breaking technological initiatives such as Applications (Apps) which are being developed by non-life insurance companies, the policyholder can monitor his/her vital health parameters such as the cholesterol readings, blood pressure, pulse rate, etc. whilst being engaged in different day-to-day activities
The Applications also offer certain category of customers an option of undertaking consultation from a Doctor through booking appointments via the App and also seek telephonic medical consultations with Doctors through requisitioning for the same through the usage of the App. The App also facilitates uploading claim documents in the eventuality of the occurrence of a claim, which makes claims processing faster.
Certain claim settlements are being automated with authorization’s being undertaken– all in a matter of 60 seconds through the use of Artificial Intelligence. The industry is truly living up to its reputation of being there for the customers during their tough times and thereby prioritizing efforts to ensure that their customers are happy at all times.
Technology has enabled insurance companies to engage with customers in different ways.
The non-life insurance industry is increasingly looking at offering seamless insurance services to various sectors of the economy and would also aim at extending convenience to their customers while procuring insurance through seamless integration of the technological systems. The sublime use of technology has given a big boost to the sourcing of insurance policies thereby improving overall insurance penetration as well.
The General Insurance sector holds tremendous potential from a long term perspective. The Indian insurance industry is a gold mine of opportunities waiting to be exploited. Whilst responsibilities keep evolving and challenges keep coming, having in place a robust digital plan is the also the essence of a strong Business Continuity Plan and is certain to allow an organization to sail through tough times as well.