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How digitalisation is boosting budding India's insurtech ecosystem

Technologies like AI, ML and data analytics offer insure-techs real time visibility into customer lifecycles, helping them identify potential risks and devise customised offerings based on a user's policy history

How digitalisation is boosting budding India's insurtech ecosystem
POSTED ON March 04, 2023 4:02 PM

Several new-age technologies have transformed the archaic paradigms in India's vital business sectors. The insurance-oriented start-up ecosystem has especially thrived significantly due to the onset of digitalisation in the country. 

According to various industry reports, over 142 insurtech start-ups operate in the country currently. Digitalisation has enabled these start-ups to cater to a larger audience by utilising the internet and social media. Freed from the limitation of having physical offices, they can provide their services to clients pan-India, increasing insurance availability and affordability for more potential customers. 

Understandably, insurance players are demonstrating a growing affinity for digitalisation as it can drastically reduce their operating expenses. At a time when companies are doing their best to rein in costs, digitising and automating procedures with the integration of data analytics can help them make intelligent judgements and digital transactions.

Insurtech's New Digital Age Era

The digitalisation of insurance-centric start-up enterprises has simplified claims processing and redressal procedures, which was a bane for customers earlier. While speaking at an industry event a couple of weeks ago, Insurance Regulatory and Development Authority of India (IRDA) chairman Debasish Panda emphasised how the adoption of ChatGPT, Web 3.0, and public blockchain can significantly help in innovation when it comes to insurance-related offerings. IRDA is a statutory body under the jurisdiction of the Ministry of Finance, which is tasked with regulating and licensing the insurance and reinsurance industries. 

"Public blockchain will further enable smart insurance contracts to contain all information in the book that would be designed to monitor live data and react accordingly, triggering an instant payout in real time," Panda claimed. 

Fortunately, most industry stakeholders are already incorporating the latest technologies like Artificial Intelligence (AI), Machine Learning (ML), data analytics, predictive analysis, Internet of Things (IoT) and blockchain to settle insurance grievances quickly and proficiently. Implementing these tech components has heralded 'ease of communication', which is critical for the success of insurance start-ups. 

Customer Experience Gets A Fillip 

Gone are the days when policyholders would queue up in an insurance service provider's offices, armed with documents, to finalise paperwork to get their reimbursement or other details. They can now utilise digital mediums like websites, dedicated apps, chatbots, social media, email etc., to converse with insurance companies. 

Insurtech insurance
With digitalisation, insurtech start-ups can focus on providing individualised and seamless consumer experience that caters to their customer needs

With the contemporary era of digitalisation, insurtech start-ups can focus on providing a more individualised and seamless consumer experience that caters to their customer needs. This proactive approach is made possible by leveraging data, which helps them better understand user preferences and behaviour. 

Moreover, the multifaceted features of dynamic technologies like AI, ML and data analysis allow companies to navigate through varied data sources, such as social media posts, specific income sources etc., faster when collecting important information crucial for processing insurance policies. The assimilation of this client data provides insightful and valuable information, which they can use to process consumer requests.  

Trawling these data sets also allows insurance start-ups to design innovative products that cater to a customer's evolving needs. For example, usage-based insurance, which charges premiums based on how much the insured object is used, has become more popular with the rise of connected devices. 

Everything funnels down to deep diving into data and dissecting the customer lifecycle in real-time. This will give insurtech companies 360-degree visibility into their clientele based on ongoing or previous interactions, augmented by granular insight into the user's policy history.

Many insurtech start-ups also utilise ML to calculate premiums for various policies, be it health, general or travel insurance, by seeing their quote history and understanding potential risks. Early threat identification gives them a tremendous edge and allows them to incorporate underwriting policies efficiently. 

Acting As A Growth Catalyst 

Digitisation in the insurance domain has changed the pace of erstwhile processes into real-time accessibility, raising the bar regarding customer expectations. Today, with access to digital tools at their fingertips, users demand zero lag time while seeking a solution for their insurance and financial needs. 

Companies can leverage technologies like chatbots based on generating pre trained transformers (GPT) to exponentially decrease the turnaround time for many transactions. Moreover, IoT can provide them access to vast data, including real-time information about policyholders' lifestyles. They can integrate, analyse and utilise this derived data to customise existing or new policies and enhance the overall policy executions. 

Digitialisation can help insurtechs focus on innovation instead of processing paperwork. User insights can help them better understand their market and engage with policyholders more effectively to improve the customer journey while better understanding the risk landscape. 

-- Deepak Bhuvneshwari Uniyal, co-founder and Chief Executive Officer at Insurance Samadhan 

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