Business Today

Towards A Simpler World

"India has one of the lowest insurance penetration rates among the big countries. The government is trying to change this through schemes such as Ayushman Bharat."
Kamesh Goyal   New Delhi     Print Edition: January 13, 2019
Towards A Simpler World

Twenty years back, a regular Sunday would mean taking your family in the car, singing away to songs on the radio. You would go to the tried and tested restaurant and order the safe favourites and then return home to catch the favourite prime time show. Sunday, well spent!

Of course, you know where we're going. Sundays today are different for each one of us. For some, Sundays are meant to unwind, binge-watching recorded TV shows or sitting on the couch and shopping online; for others, it is experiencing a new restaurant in town suggested by a food app or catching the latest play in town. Technology is playing a vital role in helping us customise our lifestyle! With improved telecom and internet penetration, the youth is going digital. And when digitisation is introduced in a service industry, one sees an improvement in efficiency, productivity, and far greater transparency and accountability.

Insurance is not untouched by this. Yes, we took some years to get there, but the cat is moving now.

Digitisation & insurance

Insurance is a positive and simple word. It is meant to comfort people. But years of re-writing of terms to protect ourselves from liability in certain cases has made it complicated and uncertain. The products, processes and documents, all end up fuzzing the consumer's brain, leading to either the consumer not being interested in any product not mandated by the government or buying something with half understanding, which further creates discontent at the time of claims.

When we say simple, people think of digitisation. Yes, digitisation is important to bring in simplicity, but it is a means to an end. It enables the entire framework across products, distribution and buying and claims process. But the need is to rethink the way products/processes are conceptualised.

Modularity of products

Products, for example, have for long been standard, giving limited choice to people to buy something that would make sense to them, leading to a lot of mis-selling in the garb of bundled benefits. Digitisation will enable customers to see the unbundled product. For example, in life insurance, people will be able to compare how much will they be paying for only risk from insurance versus if they invest somewhere else.

This modularity is something that is needed for general insurance too. For instance, one of the biggest fears in people's mind about their phones is screen damage. This means only a screen damage cover is relevant for them instead of the full offering.

Digital-first processes

Processes are where the magic of digitisation comes in full glory. In insurance, the processes must be designed to remove redundancy and fasten the buying or claims experience. And allowing self-inspection of one's car, accepting soft copies of bills as proofs, are a few such processes laid down to minimise delays and smoothen the claims process.

Digitising the claims journey also affects how customer care is structured. The customer should get seamless experience across platforms. So, if someone pings with a claim request on messenger or Twitter and then calls on the toll-free number, she should feel she is speaking to the same person. This requires automatic information transfer between the online reputation management team and the customer care team.

An often-asked question is whether physical presence is needed. Human intervention cannot be ignored completely, yes, but if a customer needs to walk into an insurance company's office, the battle is lost. The role of the brick and mortar format should be limited to servicing and supporting distribution partners and as a process structure, if someone has a smartphone, we should be able to service him or her completely digitally. For example, when customers call to make a claim, having them fill long forms describing their problem again is redundant. So, we have audio forms, that is, we record the conversation and that is automatically registered as a claim.

Role of transparency

Digitisation empowers customers to research about products and track real time movement. With this empowerment comes a promise of transparency from the company. For instance, mutual funds, which people thought were complicated and, hence, required middlemen, have been transformed with the help of transparency and technology. With clear information in easy to digest formats and interfaces, people are creating their investment portfolios with ease. They can also track their gains and losses online. In insurance, too, transparency in product design, accompanied by technology, has empowered the end customer, making the overall insurance experience much more pleasant.

This transparency can also fuel customisation. For example, for health insurance, the needs of people across age groups differ based on factors such as their life stage, if they are moving across countries, the kind of job they are in, and more. Hence, the product should be able to offer different solutions based on the needs of each group.

The tech-edge

Digitisation is about being able to improve efficiency, that is, being able to deliver more with lesser resources.

Firstly, being on cloud enables companies to scale up quickly. Handling increasing volumes can be challenging for a new company competing with entrenched players. Cloud helps in overcoming this, allowing us to meet the demand immediately instead of waiting for months for infrastructure or hardware. Secondly, in an ecosystem of partners, simple API integrations provide a smooth interface for both partners and end-consumers. For example, if an endorsement needs to be made or there are changes from the customer's end, cloud enables smooth data transfer, avoiding double data entry. The idea is to empower the partners, which results in reducing costs and upping the service quality simultaneously. Thirdly, there are a lot of repetitive tasks in a process-heavy industry like ours. Therefore, when we built our technology team, our long-term approach was to keep operations as lean as possible. This meant our energies move towards automation through bots and machine learning.

The future of insurtech

Insurance is shedding redundancy and welcoming change. Change that is backed by a fresh thinking and technology.

The future will see insurance seeping into more finer grains of the consumers life where there will be products relevant to day to day activities and lifestyle. For instance, we have seen adoption of smaller ticket products like travel and screen damage insurance. We will also see different models, including vertical insurance players, just like you see in e-commerce.

In terms of salience, we've already seen e-commerce companies themselves entering into the business as they have active customer base and existing technology as their strengths. What will be interesting to see is how they build their resource capability as this is an industry built on the expertise of its human resources.

Finally, we will see disruptions across aspects and this won't just come from the new companies but also from the traditional players. We should see more efforts towards simplification and greater focus on service and reducing costs. For example, with availability of more data and moving away from paper-tariffs, the companies will price risks more efficiently.

At the end of it all, wherever the inspiration comes from, the end-customer will benefit, and that's what a simpler world of insurance will really mean.

The writer is Chairman, Digit Insurance

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