The COVID-19 pandemic has forced a wave of “remote” services into areas that reportedly required physical presence. It made us reinvent age-old practices and bring innovation to the way businesses are run, including insurance. For a long time it was thought that the insurance industry can only function properly if people are physically present. For example, insurance agents who sell policies, surveyors who perform manual inspections, etc. However, innovation has eliminated this entrenched perception by integrating technology into the company’s operations and addressing the challenge posed by the pandemic: restricted access.
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This article is an attempt to explore some of such highly anticipated technologies that keep the wheel of insurance services spinning seamlessly, even during the COVID-19 pandemic. But let’s understand digital insurance first.
What is digital insurance?
The process by which insurance companies use digitized systems in their workflow to bring efficiency and reduce manual work is digital insurance. Most operations are done over the internet with the help of advanced software and smart devices.
You can take out or renew your insurance from your smartphone. Filing a claim is also easy and you don’t have to physically go to the insurance company or submit paper documents. Due to the digital remote operation, the time required for claim settlement is shorter. This in turn increases customer satisfaction.
Also read: Digital-first business model is the only way forward: Rikhil Shah, CFO, SBI General Insurance
Top 6 Digital Insurance Trends for 2021
1 Future-proof against risk with Predictive Analytics
Insurance as a company would hardly make sense if one-size-fits-all products are sold to consumers. The products need to be customized according to the uniqueness of each customer. For example, the premium charged to a customer with a high risk may not be equal to that of 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 adoption process, after which the corresponding policies can be generated. Differentiating customers based on their risk profile is also profitable for the company.
2 Tailor-made insurance products based on consumer data
By transparently collecting relevant information, you can build products that customers really want. This process is quite simple and can be completed without much hassle. Data useful for creating customized insurance plans can be obtained in several ways. Whether it concerns the simplest form of communication such as a Q&A via the purchase process or from complex system integrations. For example, the car registration details can be filled in from the Indian government’s VAHAN database while buying a car insurance policy. Predictive Analytics also helps create custom insurance products.
3 Low Code/No Code Platforms for Non-Tech Departments
Every insurance company wants to create systems that help reduce or eliminate inefficiency from its workflow. This is why Low Code/No Code Platforms are gaining popularity. These are simple pick-and-select computer elements that can eventually form a custom application or software system. Low Code/No Code models eliminate the need for technical teams to write line by line of code for the smallest internal apps. And not everyone who needs an improved workflow has to write code thanks to this new technology.
4 Integrating IoT with InsurTech
Any existing object can be connected over a network because the new IPv6 protocol can hold more information. This is what basically defines the Internet of Things (IoT). The IoT technology can be used for insurance to create highly cost-effective, real-time systems that can create a time-saving application. Here are a few examples:
A. An IoT system embedded in a car to monitor speed, number of breaks, health of car parts and overall driver behavior.
Also read: Digital-first approach is the need of the hour for the insurance industry: Ashwin B, COO, Exide Life Insurance
b. Gadgets such as a pacemaker or fitbit connected to a network that provides real-time health data.
c. An IoT device integrated with a home’s burglar or fire alarm.
5 AI-powered chatbots
Chatbots are commonly used on many e-commerce websites to answer common questions. They have a limited number of answers and can give a customer the feeling of talking to a machine. The personalized, human touch is missing in these bots. AI Chatbots are an upgrade to a regular one. These can assist customers in the purchase and claim process, advise on premium reduction or cross-selling of customer-relevant products. AI Chatbots can significantly reduce operating costs. The end-to-end process can be completed without human intervention when using an AI Chatbot.
6 The Rise of RegTech
An insurer’s compliance and regulatory requirements cannot afford to fall behind as InsurTech moves forward at lightning speed. Insurance products that may have seemed unthinkable in the real world a few years ago are now not only made, but also consumed by customers. Such products are rigorously tested and controlled by the regulatory body. Accordingly, RegTech, or Regulatory Technology, has been introduced. It helps insurance companies meet compliance requirements.
The Indian insurance industry includes both traditional and modern insurers. This is where digital insurance companies gain a competitive advantage over traditional ones. Without RegTech, they would lose the edge and get stuck with risk and compliance issues.
Also read: Always read the fine print of policies for travel after Covid: Biresh Giri, CRO, Acko General Insurance
In a nutshell
The year 2021 is about recovering from the shock of a pandemic and finding ways to sustain the new normal. It’s where digitization has been most helpful. Businesses are running smoothly, even during the eminent lockdown and isolation. Thanks to new technological innovations, it is possible to stay connected and offer insurance services without human intervention.
The opinions expressed in this article are the personal views of Animesh Das, Senior Director, Motor Underwriting, ACKO.