Technology advancement and transparency of policy holders are the only way for seamless insurance ecosystem
In an era where policyholders grapple with underwriter rejections and sluggish claim settlement processes, industry stalwarts underscore the pivotal role of technology in reshaping the landscape of insurance services.
“In the evolving landscape of underwriting, where the customer’s claim becomes the focal point of dilemma, the synergy between AI analytics and traditional methods, paves the way for a more refined decision-making process,” says Lavanya Iyengar, Editor at ET EDGE
Manual to automated transformation through integration of AI
The integration of AI and data analytics has emerged as an interest for all, acknowledged by industry leaders as crucial for navigating the complexities of modern insurance. With the proliferation of AI-driven tools, the scale of operations has surged, demanding a shift from traditional manual controls to automated systems.
“In the dynamic landscape of the insurance industry, growth at an unprecedented pace demands a shift towards innovation. With a remarkable 18% year-on-year expansion, manual controls alone cannot steer our trajectory as India being 10th largest in the world in the life insurance space. The evolving geographies, shifting customer segments, and the influx of new insurtechs necessitate a transformative approach. Embracing data analytics and AI isn’t just pivotal; it’s imperative for us to thrive amidst this change.” Dr. Porus Peshoton, Executive Vice President at Max Life Insurance
The paradigm shifts from manual controls to automated systems has not only streamlined the underwriting processes but has also empowered insurers to better assess risks and enhance customer experiences.
AI and technology have undeniably aided underwriters, although it challenges the traditional notion of human interaction within India’s general insurance sphere. In pursuit of broader outreach and increased market penetration, technology emerges as a pivotal force.
Furthermore, the shift from preventive or prescriptive analysis to predictive analysis in data evaluation during underwriting has substantially benefited the industry. This transition ensures precise coverages and appropriate pricing, highlighting the pivotal role of technology in shaping these advancements.
Arti Mulik, Head Underwriting & Product at Universal Sompo General Insurance, notes, “Earlier, the eight-page long application form was time-consuming. However, the paradigm shifts to automated systems have empowered insurers to better assess risks, enhance customer experiences, and streamline underwriting processes.”
The landscape of insurance has undergone a significant transformation, emphasizing its purpose for the people and the insured individuals. Presently, the industry reflects a notable shift, moving away from traditional practices, much like the alteration observed in manufacturing processes.
Automation has become a cornerstone, reshaping operations. Consequently, these changes within the insurance sector are redefining the perception and evaluation of human risk.
Risk Assessment
The industry’s reliance on technology is further amplified with the integration of predictive analytics and IoT devices in assessing risks across various domains such as motor, liability, cyber, and health insurance. This emphasis on technology’s critical role in evolving risk assessment methodologies is highlighted by the agreement signed by industry leaders.
Dr. Porus Peshoton, Executive Vice President at Max Life Insurance says, “The evolution of underwriters has been remarkable, sourcing real-time information from diverse channels, leading to increased ownership and an improved sense of responsibility.”
In such a scenario cybersecurity is the utmost requirement. However, with digital transformation comes the burgeoning cyber risk landscape. Insurers are urged to adapt their underwriting approaches to acknowledge the dynamic nature of cyber threats, a sentiment echoed by industry experts to mitigate potential liabilities and better protect policyholders’ interests.
“We’ve seen technology’s demonstrated ability to sharpen insurers’ acumen in risk selection, making insurance more accessible and affordable. The advancements in verification processes further underline its pivotal role. Ultimately, technology not only facilitates but significantly improves insurers’ capacity to mitigate risks and create quotes that resonate effectively in the market,” says Dr. Syed Asif Hussain, Chief Underwriting Officer at Tata AIA Life Insurance
Insurance frauds are at its peak a proper guidline and regulatory framework is essential.
Unlike mature markets such as the USA or Canada, where criminal actions can be pursued against fraudulent actors despite massive financial losses, the Indian market lacks a similar framework. This gap underscores the need for comprehensive guidelines to combat fraud effectively within the Indian insurance industry,” Shashi Kant Dahuja, Chief Underwriting Officer, Shriram General Insurance Co says.
From the integration of predictive analytics to the utilization of IoT (Internet of Things) devices in assessing risks in different insurance domains, including motor, liability, cyber, and health insurance, the agreement underlined the critical role of technology in evolving risk assessment methodologies.
“Given the evolving risk landscape and emerging trends, the industry requires a wealth of data to enrich its offerings. We’ve taken strides by automating two of our products on the liability front, signaling our intent to progress in this direction,” says Najm W. Bilgrami, SVP & National Head – Financial Lines, TATA AIG General Insurance Company.
Customers’ experience
The transformative power of technology in enhancing the customer experience cannot be overlooked. Industry has witnessed that technology plays a pivotal role in refining and elevating the customer journey in various industries.
“In the insurance space, whether it’s streamlining onboarding processes or expediting claims settlements, technology is the cornerstone at both the entry and exit points of an insurance policy. Throughout the entire lifecycle, its influence is undeniable and will only continue to evolve.” Dr. Syed Asif Hussain, Chief Underwriting Officer at Tata AIA.
Also, to get a customized seamless service and to avoid claim rejections “Policy buyer needs to be transparent with your underwriters and share as much information as you can then we will be able to provide much better solution” Najm W. Bilgrami, SVP & National Head – Financial Lines, TATA AIG General Insurance Company.
The harmony among industry leaders aims for a unified understanding: technology is the driving force revolutionizing the insurance sector, shaping a more efficient, customer-centric, and risk-aware industry. As the insurance landscape continues to evolve, staying up with technological advancements remains not just a choice, but a necessity to ensure resilience and adaptability in a rapidly changing environment.
The conversation occurred during the panel titled “The Underwriters Dilemma: Facilitating better claims settlement” at the 10th annual ET Now Insurance Summit and Awards held on December 15th in Mumbai, curated by ET Edge.
