Page 23 - The Insurance Times May 2021

Crop Insurance
Y Pradhan Mantri Fasal Bima Yojana(PMFBY)
Y Restructured Weather Based Crop Insurance Scheme
(RWBCIS)

Insurtech is acting as an enabler for increasing penetration
under crop insurance. Internet is one of the examples
wherein it is providing a perfect platform for use of
technology in crop insurance. All the stakeholders of crop
insurance starting from Government, insurance companies
to distributor are having an access to detailed information
of Underwriting and claim data. The cost of collecting this
data through manual form has reduced due to use of
internet.

Technology is providing all the critical information to insurers
in a fraction of seconds with less cost. Satellite, drones,
mobile cameras are highly cost-effective means of collecting Therefore, at an aggregator level, people must understand
data and this cost efficiency is certainly encouraging that there is huge potential for insurance in India. India still
insurance companies to increase crop insurance has low, single-digit insurance penetration - despite the
penetration.
number of insured increasing during the last few years. With
a population of over 1.3 billion, it is an epidemic. We are
Distribution incredibly underinsured.
We see that traditional distribution networks are not only
economically unviable for insurance firms but are also To cross-sell personalized insurance, some of the insurers
cumbersome from a customer perspective. Marketing and have started looking beyond traditional distribution channels
distribution in today's age require having an omnichannel and explored strategic partnerships with newer channels
presence. The millennials have come to expect 24x7 service such as retail aggregators (Amazon, Flipkart, etc.)
availability. They want to have policy comparisons, quotes Telecommunication providers (Airtel, Vodafone, Jio, etc.),
and policy terms and conditions made available to them in smart home devices manufacturers (Amazon, Xiaomi, etc.),
a device-agnostic online platform, at a place of their AR/VR device providers, telematics device manufacturers,
choosing. An online distribution channel is a low hanging sharing economy providers (Uber, Ola, OYO, etc.),
fruit, which also leads to the most coveted commodity of transportation providers (IRCTC, bus providers), and
them all, consumer data. Since this segment of digitalization messaging apps (WhatsApp, Facebook messenger, etc.).
has already seen considerable disruptor activity, any lapses Allianz, for example, has set up a joint venture with Chinese
in capitalizing on it can prove detrimental to an insurance Internet giant Baidu that enables it to apply data about
firm. consumers' online behavior to create customized offers.

Some of the products like travel, motor and personal For example, Acko General has tied up with Amazon, Bajaj
accident insurance require very little changes as they are Allianz has tied up with Flipkart to offer mobile insurance
mostly based on prospect information. The intervention Etc. Shriram General, Bharti Axa, and Bajaj Allianz has tied
required for such products is minimal and the training and up with IRCTC to provide PA cover to Passengers.
exams for such persons could be of a lesser degree than
those for a full-fledged distributor. In fact, last year, IRDAI With mobile and Web technology, consumers across tier 2,
had allowed the general insurance industry to use point-of- 3 and 4 cities and rural India will have access to multiple
sale persons to sell general insurance products. For this, it insurers and transparent prices. Apart from reducing the
identified products that are simple to understand, and in cost of delivering the policy, and cutting down the branch
which the benefits are stated upfront and are fixed and network, online insurance selling also delivers transparent
predefined. information to consumers.

The Insurance Times, May 2021 23