Leveraging key technologies such as AI and ML to increase insurance penetration

Consumer behavior has changed dramatically with the advent of technology and rapid digitization in insurance. As a result, technology-driven innovation has become much more important across the value chain in the financial services ecosystem. With the global threat posed by the massive pandemic, the perspective on financial protection has changed both domestically and globally. This has led to a significant increase in demand for insurance, particularly in the health and life insurance segments.

While certain populations are beginning to gain awareness, a large portion of the country’s 1.3 billion people have no insurance, particularly health insurance. Both health and life insurance are widely penetrating the country’s top 40-50 cities, and there are millions of people who have the purchasing power for insurance but lack access, making it an underpenetrated market. This is where technology comes into play.

The cornerstone for Insurtech companies

It is now common knowledge that technology has transformed and taken center stage in every aspect of our lives. It’s not too different for the insurance industry. In recent years, cutting-edge technologies such as AI, blockchain and IoT have become key for insurtech platforms to build robust business strategies, expand their reach and serve an underserved market. Fortunately, today’s younger generations come from the generation of digital natives who know how to implement these technological platforms for the most appropriate insurance products and seamless services.

Customer data and intelligence:

The Indian insurance sector has evolved to a whole new level in the last 2-3 years where customer data and information drives the entire value chain. Traditionally, insurance underwriting has been a highly employee-dependent process that involved numerous levels of analysis, identifying historical data with complex systems, processes and workflows. These AI-driven processes help collect, read and deliver insights and predictions from the vast pool of data. This automation process also eliminates outdated rules that take weeks and months to complete the end-to-end underwriting process.

The AI-based automation

Like most other industries, Insurtech also has a variety of tasks related to day-to-day business. That would mean investing a lot in personnel and thus incurring additional costs that the company has to bear. However, established companies in the industry are using AI to automate complex, tedious tasks, including answering customer queries. With fast, efficient and seamless services alongside the data collected, it is now becoming easier to offer the most suitable insurance policy.

RPA-enabled data management

On Insurtech platforms, RPA (Robotic Process Automation) automates the usual workflow, significantly reducing overall costs and making the end-to-end process more efficient. This efficiency means claims processing time is reduced, data collection is automated and far more accurate than manual collection, resulting in both consumer satisfaction and the satisfaction of the insurance community.

Technology has caused a paradigm shift across the insurance industry and the changes are expected to accelerate over the next two years. Recent innovations and rapid advances in technology will lead to major disruptions in the insurtech space, and companies that adopt these technologies faster will thrive.

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Disclaimer

The views expressed above are the author’s own.



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