Page 37 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 25

underwriting to claims management and customer service. By enhancing operational efficiency, customer
experience, and product offerings, technology can play a pivotal role in driving insurance adoption.

Firstly, technology can enhance the distribution of insurance products. Traditionally, buying insurance
was often a cumbersome process involving a lot of paperwork. Now, with digital platforms, the entire
insurance buying process can be done online, making it convenient and user-friendly. Digital platforms
can reach a wider audience, including those in remote areas, thus driving insurance adoption. Insurtech
startups are at the forefront of this digital wave, providing innovative platforms for insurance distribution.
Digital technology, particularly AI and machine learning, are key enablers of these new distribution
models. These technologies can drive personalisation, making it possible to offer customised solutions
tailored to individual customer needs, increasing the appeal of insurance products thereby driving adoption.

AI and ML also have the potential to streamline the underwriting process, making it more efficient
and accurate. On the other hand, blockchain technology can enhance security, transparency, and efficiency
in transactions, particularly in the areas of policy issuance and claims settlement.

Furthermore, technology can enhance customer service in the insurance sector. Improved customer
service can increase customer satisfaction and loyalty, thereby boosting insurance adoption. Internet of
Things (IoT) devices are another technological advancement driving insurance adoption. For instance, in
motor insurance, telematics devices can track driving behaviour, enabling insurers to offer usage-based
insurance. This can attract customers who prefer pay-per-use models instead of traditional flat-rate premiums.

We are moving beyond the traditional paradigms of insurance and embracing a more dynamic and
responsive model powered by data, digital innovation, and a deep understanding of customers’ needs. In
this era of rapid change, we see countless opportunities to provide value, security, and peace of mind to
customers. Some salient examples of the use of technology in insurance are:

 Risk Assessment and Pricing: Accurate risk assessment is crucial in insurance. New technologies
allow for more granular risk assessment, facilitating risk-based pricing. Insurers can use ML algorithms
to analyse a large amount of data and accurately determine a customer’s risk profile. This information
can help insurers price their policies more accurately.

 Fraud Detection: ML can significantly improve insurers’ ability to detect fraudulent claims. By
analysing patterns in past data, ML algorithms can identify suspicious claims and flag them for further
investigation. This not only saves money for insurance companies but also contributes to lowering
premiums for honest policyholders.

 Health Insurance: Wearable devices like smartwatches can track a user’s health data, such as heart
rate, sleep quality, and physical activity. Insurers can use this data to offer personalised health insurance
premiums. For example, a policyholder who maintains a healthy lifestyle, as evidenced by data from
their wearable device, could receive discounts on their premiums.
 Motor Insurance: Telematics devices can track a driver’s behaviour, including speed, braking habits,
and distance travelled. This data can enable insurers to offer usage-based insurance (UBI), where safe
drivers are rewarded with lower premiums. For instance, a driver with a consistent record of safe
driving, as per the telematics data, could receive a discount on their motor insurance premium.