The Big Digital Push

India's life insurance sector is at the cusp of a major transformation, led by digitisation, factors like multi-distribution, product innovation, innovations in claims management and regulatory reforms. Amid growing uncertainties about life and emerging risk factors like lifestyle disorders and rising incidence of accidents, not having an insurance cover is not an option, especially for those with dependents. Yet, when it comes to insurance penetration, India ranks way lower compared to its global counterparts - the deficit of trust between insurers and consumers being the chief reason. But things are changing for better.

There has been a conspicuous shift towards digital and customer-focused strategies amongst insurers. They are focusing on the customer-facing elements of their processes, like faster, intuitive websites, and user-friendly apps. Insurers are also leveraging technology to strengthen their internal operations, leading to improvements in turnaround time for superior claim settlements. With digitisation, insurers have new tools for increasing the quality of customer interactions while improving operational efficiencies.

The growing insurance market offers scope for better penetration through multiple and diversified channels such as the Internet, direct and tele-marketing, and NGOs. Insurers can differentiate themselves through the depth of their distribution channels. Looking ahead, individual insurer's ability to offer an integrated multi-channel experience will be the key to customer satisfaction and profitable growth.

Meanwhile, a significant amount of resources is being channelised towards product innovation to design and distribute products to meet the needs of a larger ecosystem. Customers will benefit from higher-quality offerings in under-penetrated product segments like long-term savings and annuities. Increased levels of customisation will also be possible through product innovation.

Timely and efficient management of claims to prevent delays is another key focus area for insurers. The single-most important factor for superior claims management is providing peace of mind to policyholders that their dependents will not be unduly burdened with their funeral/ related expenses, and that the payouts will reach them in the shortest possible time. Particularly, the sensitivity around processing death claims mandates that insurers provide the utmost flexibility to process a claim. Using the digital channel allows family members to complete the claim online, and avoid talking to an insurance executive if they prefer not to.

Meanwhile, the regulatory environment is getting conducive for the growth of insurance sector. With passing of the Insurance Laws (Amendment) Act 2015, Indian insurance sector's long-time demand of having better access to foreign capital has been met. Access to fresh capital could lift the fortunes of insurance industry.

The column is written by, Pankaj Razdan, MD & CEO, Birla Sun Life Insurance