2020 was a doorway, a glimpse into exciting possibilities for the insurance sector. In an increasingly uncertain world, does it come across as any surprise that the canvas of opportunities for the insurance sector has expanded? Much of this has been possible with insurtech: The advancements in insurance technology. The optimal combination of insurance and technology can undoubtedly unlock the potential and value of the insurance ecosystem.
Especially in the Indian context, which is stated to have the largest smartphone user base in the world according to a PwC and ASSOCHAM report titled ‘Video on Demand: Entertainment Reimagined’. The demand for digital services due to increased smartphone and technological penetration is only set to increase as India is expected to have 820 million smartphone users by 2022. Based on insights from Entrepreneur India let’s take a closer look at why 2021 is set to be a definitive year for insurtech.
Digital insurance expanding
Insurance has always been a contact-driven market, relying heavily on physical channels such as advisors, resellers, offices, and call centres. With the epidemic, however, insurance has jumped on board the digital bandwagon: Insurance advisors today are using digital technologies to engage and transact with their clients.
In addition, with the rising client demand for online insurance, the self-service digital channel is developing. With the support of innovative technologies, offline operations are easily transferring into the digital ecosystem, and digital insurance is likely to flourish in 2021. Also, the digital landscape opens up a new dimension to address customer need-gaps in the new normal with a plethora of innovative products. A one-size-fits-all approach is no longer as effective amidst changing consumer demand patterns.
Proliferation of smarter technologies
Technology is at the forefront of the service industry, thanks to the growing number of smartphone users. The Internet-of-Things, or IoT, is a technology that is expected to pick up steam in 2021, bridging the gap between linked smart gadgets. Wearables, for example, are predicted to increase the personalization of insurance coverage for people while simultaneously lowering health risks. Insurtech will be transformed by the Internet of Things (IoT), which is a cornerstone of Industry 4.0, in 2021.
We are witnessing an increase in the features of smart wearables, including a plethora of health tracking options that could further expand the product and service canvas of the insurance sector. The advent of hybrid cloud focussed business models in BFSI means that insurtech enterprises have a greater degree of flexibility, speed, and responsiveness. It adds a whole new dimension to their capabilities in many ways, especially with regard to contactless services and data analytics.
AI is a gamechanger
To be able to leverage data correctly, organizations in the insurance sector must be able to garner insights in a timely fashion. These findings can be used to improve customer service and efficiency while also encouraging automation. With AI, insurtech companies may improve claim turnaround times and alter the underwriting process. For better and more efficient experiences, these breakthrough technologies can help with fraud detection, anti-money laundering, and processes for pricing.
From distribution to underwriting and pricing to claims, AI and associated technologies will have a seismic impact on the insurance sector. Distribution and underwriting are already being influenced by advanced technology and data, with policies being priced, purchased, and bonded in near real-time.
2021 could be the year where we might see dramatic changes in the insurance value chain. With technologies like AI, the approach towards risk-management and claims becomes much nuanced and seamless. It could lead to a new dawn for contactless insurance products and services opportunities.