Page 29 - Life Insurance Today January-June 2020

As a result, insurers will have the opportunity to move The insurance sector needs to quickly understand these
towards an increasingly virtual claims and policy trends, expedite digitization of processes, leverage data
management system. Insurance companies will therefore and technology to prevent digital fraud and make efficient
have to be tech-savvy to implement and use the right investments to mitigate risks and stay one step ahead of
infrastructure to offer products that are simple to the competition. The insurance industry is fast adopting
understand, easy to distribute (often as personalized online digital technologies that are expected to give a push to
products), track and claim. Intuitive User Experience market penetration of insurance products and their efficient
designs for such interactions would be a prime factor in process management throughout their lifecycles.
wooing such customers. Digital Natives want easy access
to insurance policy-related details at any time. Therefore, New entrants are disrupting the industry by adopting
it is not feasible to disseminate this information through digital technologies such as telematics for auto insurance
traditional. and simplified pricing models for health insurance. A
number of digital insurance providers have evolved that
Global average investments in digital technologies are focus on providing personalized experience and innovative
increasing over the years, while the insurance industry in insurance models to simplify insurance products for their
India is lagging, both in its level of digitalization and its customers. The manner in which the Indian population is
ability to realise financial returns on its digital investments. distributed makes it expensive for Indian insurers to operate
With digital technologies comprising the core of the brick-and-mortar shops across tier-II and tier-III cities,
insurance industry's future growth potential, as well as either directly or through distributors.
being a preferred means of doing business, insurance
leaders must make sure their digital investments multiply Digital technologies will help them address this challenge
value creation substantially. by reaching out to their customers directly through self-
service options. The customer experience of dealing with
Customers need simple products that can be accessed any an insurance company through digital channels will
time (to buy or claim) and have predictable outcomes. The however require not just implementation of technology, but
language and process needs to be simplified. Opting for a also a carefully thought out user experience strategy. The
Home Insurance policy that protects the contents of one's 'Digital Natives ' who will consume these services have
home cannot be as complex as taking an All Risk policy for unique needs at the individual level and designing a
a factory that manufactures fragile products. The personalized experience for them will go a long way in
simplification of the process will extend the reach of addressing the complexities an insurance customer faces
insurance providers, which are not deemed to be efficient today.
sellers or are considered unfit to sell insurance today.
References:
Not only the traditional population residing in the remote 1. https://www.financialexpress.com/money/insurance/
corners of the country, but also the Digital Native insurance-industry-has-a-lot-to-gain-from-digitisation/
3727/
generation that has recently entered the working
population in urban areas and has the capability of 2. https://www.ey.com/en_gl/insurance/embracing-digital-
participating in the insurance market, also demands an in-emerging-markets
entirely new channel and strategy to communicate and 3. https://www.the-digital-insurer.com/wp-content/
engage with them. uploads/2016/06/710-digitisation-in-insurance_hk-
insurance-ceo-summit_fabian-sommerrock.pdf
They are not comfortable with complex terms, and opaque 4. https://www.pwc.in/assets/pdfs/publications/2017/
underwriting and benefit structures, and are looking for evolving-considerations-for-the-indian-insurance-
industry.pdf
simple products with clearly defined payment- and payout-
related terms. Such customers expect insurance companies 5. https://www.verdict.co.uk/life-insurance-international/
to interact with them at the times that they want and on comment/covid-19-insurance-value-chain/
the devices they prefer. Consumers' preference for face- 6. IRDAI Annual Report 2019-20
to-face interactions is generally low in this segment. 7. Newspapers & Journals

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