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by 2020. (BCG Report on Productivity in Indian banking: to create the popularity for digital insurance like never
2015 Inclusive growth with disruptive innovations gearing before. Customers prefer online modi because of better
up for digital disruption) pricing, increased transparency & convenience of purchase.
At present, LIC (Life Insurance Corporation) is in the process
of digitization engaged in the creation of insurance
repositories.
Alternative channels such as phone, internet-PC, and
internet-mobile are gaining popularity and sometimes these
alternative channels are preferred by customers over
traditional channels (2012 insurance survey of 16,500
customers across 30 countries. Results can be found in the
World Insurance Report 2013, Capgemini and Efma).
The rise in digital banking is also because of increased According to Digital@Insurance-20X By 2020, a Google-
mobile banking transactions. According to the RBI, the BCG report, by 2020, six per cent of all insurance sales in
number of users in 2013-14 was 12.96 million. The RBI's India will occur online. At this point, life insurance sales
technical committee on mobile banking emphasised that, contribute about Rs 300 crore, motor insurance another
in terms of per-transaction or per-branch costs, mobile Rs 250 crore, while other insurance lines such as health and
banking transaction is economical compared to the travel make up approximately Rs 150 crore of the total
traditional banking channels and hence mobile banking insurance pie. Digital influence on new insurance sales is
channel should be encouraged for long-term economic already Rs. 7000-8000 crores.
gains.
It is projected that by 2020, 3 out of 4 insurance policies
Banks like State Bank of India, India's largest bank is will be influenced online. Life insurance new business to
preparing an integrated channel strategy to optimize grow to Rs. 125-150K crores, Life insurance renewals to
services for the next three years to achieve an optimum grow to Rs. 550-700K crores; Non-life insurance to grow
mix between various distribution channels - branches, to Rs. 200-230K crores.
ATMs, POS terminals, internet banking, mobile banking and
business correspondent and customer service points. VII. Bancassurance - Concept and
growth in India
With the Liberalization, Privatization and Globalization
(LPG), the banking and insurance sectors underwent
The role of digital banking assumes paramount importance
especially in a developing country like India. By and large
almost all the banks in India have taken up to digitalized
their operations.
VI. Digitalization in insurance sector
Digital insurance in India is rising. Unlike banks, insurance
companies have not reached the digitalization process yet.
Insurance companies are exploring cost-effective modes of
distribution. Internet, mobile & social media are helping
"You know you're in love when you can't fall asleep because reality is finally better than your dreams."
Life Insurance Today February 2016 21
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