Express News Service
BENGALURU: The insurance landscape has been transforming over the years due to emerging and cutting-edge technologies such as data analytics, behavior analysis, Internet of Things (IoT), Artificial Intelligence (AI) and Machine Learning (ML).
Start-ups too are introducing innovative products and solutions to increase insurance penetration in India. They are also trying to solve many pressing challenges such as cost-efficiency in the insurance space. In India, insurance penetration was just 4.2% in FY21. During the pandemic, just like other sectors, the insurance sector too witnessed massive digital adoption. Many insurtech companies are now coming up with new offerings addressing niche needs such as pet insurance. Also, there are new covers for LGBTQ, sex-change surgery and IVF, among others.
“Insurers have embraced disruptive changes across 3 vectors – Customer experience, distribution experience and product innovation,” says Abhishek Gupta – CMO, Edelweiss Tokio Life Insurance.
Even in terms of pricing, insurers are leveraging digital solutions like AI and ML to explore ways to identify risk profiles of individual customers. This will enable the sector to personalize product pricing to a considerable degree, which in turn will elevate the end customer experience, he adds.
Insurtech platform Zopper, which recently clocked $100 million in annualized insurance premiums, uses AI and ML techniques to simplify customers’ insurance buying process. For instance, customers can buy motor insurance through WhatsApp, on an automated chatbot. Customers need to share the photo of their vehicle’s registration certificate and Driver’s License, and they will see quotes from multiple insurers. They can select the insurer of their choice and proceed to payment. “This reduces the insurance purchase effort by 90%,” says Mayank Gupta, Co-Founder and COO, Zopper.
Backed by marquee global investors, Tiger Global and Blume Ventures, Zopper says that the share of digital insurance is anticipated to grow to 19% by 2027, and it looks forward to scaling to 50 million policies over this period.
New products targeting niche needs
Employee health insurance platform Plum has introduced digital claim experience over WhatsApp. The platform has come up with Plum Lite for SMEs and start-ups, and new covers for LGBTQ and mental illness OPDs, among others.
“We are helping insurance companies by expanding the coverage through the introduction of new-age covers which were previously unheard of. Our mission is to insure 10 million people by 2024,” says Abhishek Poddar, Co-Founder and CEO, Plum. Liberty has introduced AI-based technology for quality checking of Pre-Inspection conducted in case of Motor Break in policies. This is expected to transform the car inspection quality check process, which is currently dominated by manual inspection.
According to Insurance Regulatory and Development Authority of India (IRDAI), there are 57 insurance companies – 24 in the life insurance business and the rest in the non-life insurance space. Premiums from India’s life insurance industry are expected to reach `24 lakh crore by FY31. Insurtech firms have successfully integrated many cutting-edge technologies into insurance. Besides new-age technologies like AI, automation has aided the distribution, and mobile-first interfaces have made paperless claims quicker and accessible.
Penetration is a function of access and ease of use. By making GHI (Group Health Insurance) more accessible and inclusive and by simplifying its ease of use, companies are making insurance less formidable and much more affordable, says Poddar.
Now, companies are also talking about wearable technology which will monitor customers’ physical activity through apps in order to mitigate risks by assessing relevant data. “Another area that has seen the adoption of innovation in the insurance realm is the claim process. Today, the detection of fraudulent claims and their accuracy is being taken care of by technologies like ML which detects the genuineness of a claim by comparing it with previously registered fraudulent claims,” says Ankit Agrawal, CEO and Co-founder InsuranceDekho.
A report by S&P Global Market Intelligence data says that in the Asia Pacific, India is the second largest insurance technology market, as the country accounts for 35% of $3.66 billion of insurtech-focused venture investments.
All about innovation
- According to IBEF, the life insurance industry is expected to increase at a CAGR of 5.3% between 2019 and 2023
- In terms of insurance density, India’s overall density stood at $78 in FY21
- In September 2021, new premiums of life insurers registered 22.2% growth, up from 2.9% in September 2020
- Insurtech industry is also adopting wearable technology to monitor the physical activity of customers
- ML/AI helps in fraudulent claim detection