Page 24 - Life Insurance Today January-June 2020

hospitals, which will make claim settlement faster and of using actuarial tables and other statistics to create and
reduce frauds in billing. Digital technology can help price insurance products has been around for a long time,
immensely in automobile insurance. The BCG report quotes information from social media, GPS systems and big data
an example of one insurer where the processing cost is 30% could lead to improvements in insurers' ability to assess risk
lower than those of traditional insurers. and even manage claim in an efficient manner.

If traditional insurers are to remain competitive, they must Globally, auto insurers are gathering data by using
move faster to make their legacy system more flexible a telematics devises and mobile phone applications to
better able to operate in real time. This is a significant determine premiums for new clients. It enables insurers to
implementation challenge that will require a lot of planning price the premium lower for safe drivers and higher to
and investment. An innovative way to increase efficiency those who have a track record of accidents and rash
is by introducing self-service portals, which could allow driving. Moreover, the data also helps auto insurers adjust
policyholders to do certain transactions online without any the price of policies in subsequent years and more
paper work or assistance. However, insurers face a accurately assess the risk of each policyholder.
challenge with such portals and have to move beyond just
allowing customers to access forms online and send those Similarly, life insurers can use data from social networks to
PDFs back to in electronic form. estimate its loss reserves more accurately by spotting
lifestyle changes. When it comes to technology
In the current structure of the industry, independent agents infrastructure, the BCG report underlines that traditional
develop customer relationships and, in many cases, even insurers are in a difficult spot. While on the one hand they
handle customer service. However, self-service portals have to start delivering some of the benefits of digital
would reduce the work load of agents without necessarily technology to their customers quickly, on the other hand,
increasing customers' loyalty to the insurers themselves. they are sitting on top of the legacy system, which, by their
nature, can be changed only through a prolonged and multi-
Insurers have launched pilot digital projects in risk analysis. step process. The answer lies in rolling out some new digital
Underwriting is one of the prominent areas of risk in which services even as insurers move towards a long-term
insurers could capitalise on digitisation. While the science overhaul of their legacy architectures.

Organizational Structure

Product Marketing & underwriting Claims Customer
development distribution & risk management service
profiling
Insurers
Non-life Loss Policy
Insurers management
Brokers insurers adjusters
Aggregators

Managing Claims Third party
Regulators general agents Life insurers handlers administrators
(MGAs)

Independent
financial
advisors (IFAs)
Brokers Reinsurers Third party
administrators
Affinity
partners

Source : Globaldata IT systems

24 January - June 2020 Life Insurance Today