Page 24 - The Insurance Times August 2024

process, making it more accessible and user-friendly. insurance industry by leveraging digital tools and innovative
Digital platforms can streamline policy management, solutions to address the aforementioned gaps. Insurtech
claims processing, and customer support, reducing companies can play a pivotal role in making income
administrative burdens and enhancing the customer protection and replacement products more accessible,
experience. affordable, and understandable for the Indian population.

4. Product Complexity: Many income protection products 1. Innovative Product Design: Insurtech firms are at the
are perceived as complex and difficult to understand. forefront of designing innovative insurance products
Simplifying these products and clearly communicating that cater to the specific needs of different customer
their benefits can enhance their appeal. Insurers should segments. By leveraging data analytics and AI, these
focus on creating straightforward, transparent products firms can create personalized insurance solutions that
that are easy for consumers to comprehend and use. offer relevant coverage at competitive prices. For
example, parametric insurance products, which pay out
5. Distribution Channels: Reaching a vast and diverse based on predefined triggers rather than actual losses,
population requires innovative distribution channels that can provide quick and straightforward coverage for
can effectively penetrate urban, semi-urban, and rural various risks.
areas. Leveraging digital platforms, mobile technology,
and partnerships with local intermediaries can help 2. Digital Platforms: Digital platforms enable seamless
insurers extend their reach and increase penetration. onboarding, policy management, and claims processing,
significantly reducing the administrative burden on both
Calculating the Protection Gap insurers and customers. Mobile apps and online portals
can provide customers with easy access to their policies
The protection gap is the difference between the
and real-time support, enhancing their overall
economically beneficial amount of insurance coverage and experience and satisfaction.
the coverage actually purchased. To calculate it, first,
identify the risks and target population to be assessed, 3. Awareness Campaigns: Insurtech companies can
including the types of risks (such as life, health, or property utilize digital marketing and social media to run
insurance) and the segments of the population or assets to targeted awareness campaigns, educating potential
be included. Next, estimate the economic value at risk (EVR) customers about the benefits of income protection
by gathering data on the economic value of assets or income products. Engaging content, webinars, and online
at risk, which involves collecting information on the value resources can help demystify insurance products and
of human capital, property, or other assets subject to the encourage adoption.
identified risks.
4. Data-Driven Insights: Advanced analytics and big data
Then, determine the adequate insurance coverage needed allow insurers to understand customer behavior,
by using actuarial models to analyze the likelihood and preferences, and risks better. This enables the
severity of potential losses. After that, assess the actual development of tailored products that meet the specific
insurance coverage by collecting data on existing insurance needs of different customer segments. Predictive
policies, including coverage amounts and penetration rates, analytics can also help insurers identify emerging risks
from insurance companies, regulatory bodies, and industry and opportunities, allowing them to stay ahead of
reports. Finally, calculate the protection gap by subtracting market trends.
the actual coverage from the adequate coverage to find the
shortfall, which can be expressed in monetary terms or as a 5. Automation and AI: Automation and AI can streamline
percentage of the economic value at risk. various processes, from underwriting to claims
settlement, ensuring faster and more efficient service
The Role of Insurtech in Bridging the delivery. Chatbots and virtual assistants can provide
instant support to customers, enhancing their overall
Gap experience and reducing the need for human

Insurtech, or insurance technology, is revolutionizing the intervention.

22 August 2024 The Insurance Times