Page 23 - Insurance Times December 2022

What is disrupting the insurance peer economy, the collaborative economy, the collaborative
consumption or the sharing economy, it makes it easier to
industry?
exchange resources on demand and thus, increase the level
A straight answer would be-the technology. Insurance of efficiency. It allows participants to transact without
industry in the past was seen lagging behind in the adoption owning valuable items and by extracting maximum value
of new technologies and slow to adapt to changes. from idle assets, possessions or talent, and thus, achieving
Traditionally, insurance business has been heavily reliant on cost and resource efficiency.
experienced human resources, majorly using manual
processes and relying on time tested legacy systems and Collaborative efforts among peers and even competitors
procedures. Emphasis had been mainly on dependability, become necessary in moving towards achieving reduction
often linked with size, even at the cost of lack of flexibility in cost and resource efficiency. Open technology
and responsiveness. But things are changing now. Digital architecture to share information in real-time with other
advancements, wear ables, sensors, telematic devices and product providers, channel partners and customers is yet
other technological interventions have been the major another change that is seen happening. Aggregators, on-
drivers transforming insurance. line platforms, app-based business operators work efficiently
and at reduced costs than the legacy operators. The
Newer digital technologies, improved network connections, boundaries between different financial services are getting
Internet of Things, cognitive computing and blockchain are blurred.
poised to transform the entire insurance value chain. The
insurance landscape is seen to be changing fast and is Indian insurance sector update-
evident from never-before-seen things such as availability
Over the years, Indian insurance industry has witnessed
of instant quotes, dynamic pricing, specific tailor-made
many changes. Today, around 60 insurers including 5 health
products with unique coverages. Dependability and cost insurers, 1 agricultural insurer, 1 insurer specialising in
have no longer been the main differentiators in insurance
export credit guarantee, Indian reinsurer and branches of
industry though they continue to be an area of focus for
foreign reinsurers are active in the Indian insurance market
some, while transparency, convenience and ease are seen space. Agents, brokers, aggregators, repositories, Insurance
as factors making the difference for customers. Marketing Firms, Third Party Administrators and surveyors
are playing their respective roles in the insurance business
Insurance ecosystem is an interconnected system of actions and IRDAI plays the role of development and regulation.
and services with participation by providers and
intermediaries ably offering cohesive user experience that In the Indian insurance sector, there is a mixture of old and
fulfils customer needs and expectations. A new era in new players. Some are more than 100 year old, while some
insurance is being witnessed with accelerated adoption of new kids on the block are also active. The Indian consumers
technologies, optimum utilisation of digital advancements, are also a combination old and new constituting old retired
personalised product offerings and shifting business around population, young working/ earning population and the
customer experience. The legacy operators in insurance millennials. To remain relevant, players in insurance sector
industry are getting increasingly concerned about have to get past dated assumptions about what it takes to
weaknesses in their business models and the possibility of succeed, dump the idea of one-size-fits-all and design and
losing business to digital operators who are already present develop products that address customer needs. Talent in
in the market. Covid 19 pandemic has further accelerated the insurance business has always been a critical issue.
the pace of change. May be, that should help bridge the While core domain knowledge and industry specific
gap and bring insurance at par with banking and other capabilities matter, insurance entities would need to on
financial services and remove the laggard tag it carries board human resources with newer skills such as digitization
among financial sector players. and data analytics.

Recruitments will not be limited to actuaries, underwriters
Disruptors other than ever evolving
and claims managers. On boarding of hiring data analysts,
technology- application developers will also be essential. Reskilling
There are some other drivers of change for insurance existing resources to close the growing skill gaps assumes
industry apart from technology and digital interventions. importance. Product innovation would be the key. Players
Rise of the gig economy is one of them. Also called as the need to make use of data and analytics and design offerings

20 December 2022 The Insurance Times