Insure the uninsured to make “Insurance for All” a reality

Today, around 1.3 billion Aadhaar cards have been issued to Indian Citizens[i]. Remarkable feat indeed, when you consider the length and the breadth of the country, the sheer size of the population and the complexities involved. The Aadhaar card has given an identity to so many who were lost in translation. It is the epitome of inclusion. This brings me to the biggest opportunity for the insurance industry: Insure the uninsured to make “Insurance for All” a reality!

While it was never impossible, today the objective looks achievable for real. India Stack has ensured that Aadhaar and UPI are a commonplace. The value of monthly real-time mobile payments in India is INR 5.47 trillion[ii] — which equals the entire GDP of United Arab Emirates (UAE)[iii].

Like every other sector, digital has helped the insurance sector as well. It has enabled the industry to make serious inroads into demographics that were devoid of insurance earlier. Here, we unravel how the impact of digital is aiding every aspect of the insurance industry to make “Insurance for All” a reality.

• The Right Fit: Analytics and data science have revolutionized the insurance industry. Today, the relevant product is pitched to the customer after carefully calibrating permutations & combinations of  various data inputs, and analytics models. This approach not only avoids mis-selling but also ensures customer retention for the full term, thereby making it a win-win situation for both parties. Apart from this, there is the e-Insurance Account (eIA), which has revolutionized the insurance industry, providing greater convenience and accessibility to policyholders. It eliminates the need to wait for physical policy documents and ensures that policyholders have access to their policy documents electronically, making them easily retrievable at the time of claim.
• The Simple Kit: The India Stack initiative through its open APIs, Aadhar and UPI has made the KYC process more efficient, which is mandatory for any financial product, including insurance. Additionally, CKYC has become another way to get KYC digitally verified, making the process even more accessible. The Insurance Information Bureau (IIB) plays a significant role in the industry as it provides critical underwriting and claims data to life insurance companies. Underwriting is an essential component of the insurance sales process, while claims are the moment of truth for the industry when promises to pay become a reality. IIB serves as a repository of Indian insurance data, which are utilized by most life insurers during the underwriting and claims processes.
• The New Bit: Account Aggregation (AA) is a relatively new concept but has the potential to verify a customer’s financial standing. With the customer’s consent, insurance companies can access different bank accounts, credit cards, and investment accounts in a single format, allowing them to evaluate the customer’s financial position. There are many more to come like consent-based access to health records, death registry etc. in days to come.
• WhatsApp It: WhatsApp has emerged as an effective tool for customer service. With almost every smartphone user in India having WhatsApp, the WhatsApp bot is easy to use and provides the necessary information to customers without the need for additional downloads. Once the bot becomes available in the local Indian languages of the customer’s choice, it will take insurance closer to the customer’s home.
• Insurance GPT: This tool can leverage natural language processing and ML techniques to provide valuable insights, generate relevant responses, and offer guidance on insurance-related topics. Salesperson can put in a query on objection handling or scenarios in the Insurance GPT, which they can further use to ensure closure of sales.

With the reach of smartphones and mobile data to the remotest corners in India, we see a need for insurance too to be made available to people from low-income households. Digital can help bridge this social need by providing Micro Insurance to the sector. This will help to ensure financial protection to the family in case something unforeseen happens to the bread earner of the family.

In a nutshell, life Insurance is leapfrogging with all the digital capabilities to meet the mission of insuring the uninsured.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members