Page 20 - Insurance Times April 2022

insurance policies. In days to come, these two channels would Product Development – Sandbox Approach
be contributing substantially.
The insurance companies started pushing the limited use of
“telematics” to test the acceptability and uses 4/5 year back
Motor Insurance Service Provider in the Indian market. However, it did not click well with
A 'motor insurance service provider' (MISP) is the latest customers. But a strong push came in the form of the sandbox
channel in motor insurance distribution. In this channel, an approach taken by regulator recently. It allowed insurance
insurer or an insurance intermediary appoints an automobile companies to experiment their offers to a limited customer
dealer to distribute and/or service motor insurance policies base and do the feasibility study, this resulted in the filing of a
of vehicles sold through their dealership. Automobile dealers good number of products with different variations and add
act as the first point of contact for a customer looking to on benefits. All these additions are tech-based. Though the
purchase a new vehicle. Most customers purchase insurance majority of them are related to telematics, one product from
along with the new vehicles bought from the dealers. Earlier Edelweiss general is even having the provision of switching
because of commercial considerations dealers were forcing on / off of the insurance coverage depending upon the usage
vehicle buyers to have insurance cover only from their partner pattern.
insurance company. This tech-enabled channel has made it
possible for the dealers to offer the policies of all insurance Traditional underwriting giving way to
companies and now they need to listen to the call of the
customer. new approaches
The underwriting is the process of assessing risk and pricing it
Interactive power of Insurance chatbots appropriately. Higher risk perception attached to an
individual/vehicle would lead to higher pricing/premium.
The industry has seen the introduction of the chatbot in the
Various underwriting factors have to be taken into account
online / Web Aggregator model. These intelligent chatbots by the insurer before concluding a motor insurance contract.
are far more competent than the insurance agents and serve
These underwriting factors are associated with the proposer’s
as a virtual assistant in electronic apps on customers’ devices. particulars, as well as the details of the vehicle. The major
To understand the client’s queries, chatbots should be enabled
underwriting factors which have been used in past or being
with NLP, sentiment analysis to appropriately evaluate a
used even now are listed hereunder:
customer’s feedback and resolve issues and deliver
1. Age of the proposer: Higher risk is generally associated
personalised solutions for the client.
with younger drivers. The maturity of the proposer is
estimated from the age on which the accountability of
The adoption of these latest technologies and the quick TAT
the behaviour is determined.
has added to the confidence to the customer who has always
been suspicious in the past. It is possible now to offer a new 2. Sex of the proposer: One cannot choose their sex and
policy or renew the existing cover in 5-10 minutes and share hence considering it as a supporting factor may be
the policy document through the electronic way, including considered discriminatory. Men as usually perceived as
Whatsapp, which has gained good acceptance even in the a higher risk and hence they pay a higher premium.
business line. 3. Marital status of the proposer: It is usually assumed
that married people are more stable and less reckless in
Marketing relevant products comparison to single people.

Being a part of a market as competitive as insurance, insurers 4. Driving history of the proposer: Proposer’s driving history
have started to realise the immediate need for a better brings to light the past traffic offences and convictions
marketing strategy that goes beyond the traditional cold that help in determining their driving habits and safety.
calling approach. Insurers are utilizing the data not only for 5. Address of the proposer: Since every territory has its
scouting but also to develop a full customer profile. Insurance own characteristics, it is important to have the
companies can utilize the power of predictive analytics to proposer’s address in order to determine where the
gain access to the in-depth profile of customers. The motor vehicle would mostly be used.
information generated can be further analyzed to give
insights on what new products or offers the company needs 6. Description of use and distance to be covered by the
to introduce based on customer preferences. motor vehicle: This criterion helps in predicting the

20 The Insurance Times, April 2022