The COVID-19 pandemic has forced a wave of “remote” services in areas that allegedly required physical presence. It made us reimagine age-old practices and bring innovation to how businesses are operated, including insurance. For a very long time, it was believed that the insurance industry can function smoothly only if people are physically present. For example, insurance agents selling policies, surveyors carrying out manual inspections, etc. However, innovation has eliminated this deep-rooted perception by integrating technology into the company’s operations and taking on the challenge that the pandemic posed – limited access.
This article is an attempt to explore a few of such highly anticipated technologies that help keep the wheel of insurance services seamlessly turning even during the COVID-19 pandemic. But before that, let’s understand Digital Insurance.
What is Digital Insurance?
The process where insurance companies use digitised systems in their workflow to bring efficiency and reduce manual work is digital Insurance. Most of the operations are done via the internet with the help of sophisticated software and smart devices.
For example, you can purchase or renew your insurance policy from your smartphone. Raising a claim is also easy and does not require you to physically visit the insurance company or submit hard copies of documents. The time taken for claim settlement is less due to remote, digital operations. This, in turn, increases customer satisfaction.
Top 6 Digital Insurance Trends for 2021
1 Future-proofing Against Risks with Predictive Analytics
Insurance as a business would hardly be logical if one-size-fits-all products were sold to consumers. The products need to be customized as per the unique nature of each customer. For example, the premium charged to a high-risk customer should not be the same as others with a relatively lower risk. This is where Predictive Analytics comes in. It can detect a potentially “risky” customer by using a mix of technologies (Artificial Intelligence, data mining, machine learning, and more) during the underwriting process and then corresponding policies can be generated. Differentiating customers based on their risk profile is profitable for the business as well.
2 Custom-built Insurance Products Created from Consumer Data
You can build products that customers actually want by collecting relevant information in a transparent way. This process is quite simple and can be completed without much hassle. Data useful for creating customised insurance plans can be acquired from multiple methods. Be it the simplest form of communication like a Q&A through the purchase journey or from complex system integrations. For example, car’s registration details can be populated from the Indian Government’s VAHAN database while buying car insurance. Predictive Analytics also helps in creating custom insurance products.
3 Low Code/No Code Platforms for non-Tech Departments
Every insurance company wants to create systems that help reduce or remove inefficiency from its workflow. This is why Low Code/No Code Platforms are gaining popularity. These are simple pick and choose computer elements that can ultimately form a customised application or a software system. Thanks to Low Code/No Code models, tech teams are not burdened with writing line by line code for the smallest of in-house apps. And not every person that needs an improved workflow should know how to write codes, thanks to this new technology.
4 Integration of IoT with InsurTech
Every existing object can be connected through a network because the new IPv6 protocol can accommodate more information. This is what basically defines the Internet of Things (IoT). The IoT technology can be leveraged for insurance to create highly beneficial, real-time systems that can create a time-efficient application. Here are a few examples:
a. An IoT system embedded in a car to monitor speed, number of breaks, the health of car parts, and overall behaviour of the driver.
b. Gadgets like a pacemaker or a fit-bit connected to a network that provides real-time health data.
c. An IoT device integrated with the burglary or fire alarm of a home.
5 AI-Powered Chatbots
Chatbots are commonly used on many e-commerce websites to address general queries. They have a limited set of answers and can make a customer feel like talking to a machine. The personalised, human touch is missing in these bots. AI Chatbots are an upgrade to a regular one. These can help customers through the purchase and claim processes, give advice on reducing premium, or cross-sell products relevant to the customer. AI Chatbots can reduce company costs to a great extent. The end-to-end process can be completed without human intervention when an AI Chatbot is used.
6 The Rise of RegTech
Compliance and regulatory requirements of an insurer cannot afford to fall behind when InsurTech is advancing at lightning speed. Insurance products that may have seemed unimaginable in the real world a few years back are now not only created but being consumed by customers. Such products are strictly tested and monitored by the regulatory body. Correspondingly, RegTech, i.e. Regulatory Technology has been introduced. It helps insurance companies fulfil compliance requirements.
The Indian Insurance industry comprises both traditional and modern insurers. Here, digital insurance companies are gaining a competitive edge over traditional ones. Without RegTech, they would lose the edge and get stuck with risk and compliance issues.
In a Nutshell
The year 2021 is about recovering from the shock of a pandemic and finding ways of sustaining in the new normal. It is where digitisation has been the most helpful. Businesses are running smoothly even during the eminent lockdown and isolation. This is because it is possible to remain connected and provide insurance services without full human intervention thanks to new technological innovations.
Views expressed in this article are the personal opinion of Animesh Das, Senior Director, Motor Underwriting, ACKO.