Insurers faced a pressing problem last year — a surge in home insurance claims following destructive floods in Kerala.
As applications for relief from devastated regions mounted, Reliance General Insurance decided to deploy a video conversation feature, used to process motor vehicle claims, to quicken claims processing.
Policy holders went on a two-way video chat to show the extent of damage to the surveyor.
The result: Claims got processed in three days from over two weeks earlier.
This is just one example of how insurers are using technology to simplify processes and use customer data efficiently.
Insurers are adopting AI powered platforms to help agents market the right policy, and setting up virtual branches and processing motor vehicle claims based on photographs.
Broadly speaking, they are using emerging technologies, including artificial intelligence, big data analytics and blockchain to transform IT systems.
“We took a blended approach and did a few home insurance claims on video on an experimental basis,” said Rakesh Jain, CEO, Reliance General Insurance, referring to the Kerala home insurance claims.
The company is investing $10-12 million every year to upgrade technology. It was among the first to assess motor vehicle claims through video chat two years ago. Of the 30,000 such claims it receives each month, around 55% get processed through use of video.
“Indian companies are realising that they are sitting on a lot of data, and are looking at how to unlock it,” said Subram Natarajan, chief technology officer, IBM India and South Asia. IBM works with a number of insurance firms on outcome-based design, or creating products tailored to specific customer needs.
Only 4% of India is insured, which means “there are plenty of opportunities to grow,” Natarajan said.
The reach of life insurance in India was under 1% when the industry opened up to private players in 2001. It is still among the lowest globally, according to a report by the Insurance Regulatory and Development Authority of India.
More than 98% of life insurance policies are still sold directly, a joint PwC-CII report has estimated. Distribution partners will need to use technology tools to fit into a digital future, it said.
Insurers have launched mobile phone apps, making it easier for customers to transact with them. They are, slowly and surely, moving towards paperless claims as well. These are, however, only the first steps in digital transformation.
Changing core systems is expensive and complicated. So, most transformation initiatives focus on improving systems of engagement with customers.
Insurance companies are unique — most of their interactions with customers happen through an agent. In effect, a chunk of technology investment goes into improving agent experience.
Insurers have developed systems to advise agents on products tailored for specific customers, depending on their history with the insurer and income band. Bajaj Allianz Life Insurance has a mobile app to hire agents.
This helps in training, exams and licensing. It has brought on board 15,700 consultants digitally in the past year, cutting down processing time by half.
It has also rolled out a virtual branch for customers — Mosambee, a sort-of ‘branch-in-a-box’.
“Mosambee enables our insurance consultants to provide customers with all services at their doorstep, which they (customers) would (otherwise have) availed at a branch,” said Goutam Datta, chief information and digital officer of Bajaj Allianz Life.
Mosambee, launched in November 2017, has helped service more than 150,000 customers and collect renewal premiums of more than Rs 700 crore, he said.
Bajaj Allianz General Insurance, on the other hand, is using bots to answer queries on claim status and policy copy requests. It has launched a self-claim settlement tool for motor vehicle claims, up to a certain monetary limit.
“The advent of technology has influenced the behavior and expectations of customers and it is imperative that the insurance industry also evolve and offer products and processes with the changing environment,” said Sourabh Chatterjee, head of IT, web sales and travel at the private general insurer.
Max Life Insurance, another insurer in the private sector, started its digital transformation in 2015. It realised back then that rolling out a new feature would take nine months if it takes the traditional approach, too late in an industry where requirements evolve quickly.
“In 2017, we set up co-located teams with our tech partners and adopted an agile way of working, putting out solutions every 15 days,” said Manik Nangia, the chief operations officer.
Soon, updating a customer’s contact details online could be done within minutes — something that required at least a couple of branch visits earlier.
Now, more than half of its service transactions are done digitally, and it gets a fifth of new customers through the website, Nangia said.
Take the case of ICICI Lombard General Insurance. The general insurer invested around Rs 43 crore in technology last fiscal year, focusing on AI, machine learning and data analytics, among others, to increase operational efficiency. One of the things it has done is deploy sensors based on Internet of Things (IoT) technology to track marine cargo consignments for corporate customers. “This year alone, we have deployed 3,500 devices across six large corporates, and have already defused multiple hijacking and theft attempts,”
said Girish Nayak, chief of customer service, operations and technology. It also prevented a temperature-sensitive pharmaceutical consignment from going waste, when the truck carrying it met with an accident. ICICI Lombard has developed an IoT-based instant health check facility for corporate customers, and is using telematics to identify and segment vehicle users based on driving behaviour.
NEW AGE FIRMS
New age insurance firms, nimble and technologically savvy, are challenging these old economy players.
Digit Insurance, a two-year-old insurer that focuses on creating smaller value products, is using blockchain-based systems at the backend to speed up claims processing. It has already brought down time taken to service a mobile phone damage claim from about 25 days to a few hours.
“Servicing smaller ticket sizes means it has to be a cost-effective and technology-driven solution,” said Vijay Kumar, CEO, Digit. “From onboarding customers to servicing claims, we have heavily leveraged technology with minimal manual intervention.”
Many of these features, like automatically initiating and processing trip delay claims within a few hours, would not have been possible till a few years ago because the technology was simply not available.
Changing consumer behaviour is rapidly driving changes towards financial inclusion and sachet-model financial products in the insurance industry, said Veeraj Thaploo, chief technology officer, Blazeclan Technologies, which works with several Indian insurance firms on their technology platforms.
“These financial products are targeted at the mass-market, focusing more on the mid- and low-income section. Different e-commerce platforms are working with insurance companies to onboard sachet financial products on their platforms,” he said.
The changes, however, come with their own set of challenges, including the development of a high performance and scalable delivery model through technology. Due to this, most firms are opting for Cloud-based solutions.
Traditional insurers have realized this and are attempting to keep pace.
Max Bupa Health Insurance recently tied up with fintech firm Mobikwik to tap into millenials and first-time buyers.
“Bite size insurance is an emerging trend, and with this too, we are working in line with changing needs of customers,” said CEO Ashish Mehrotra.
Insurance companies need to streamline processes to make buying and usage of health insurance convenient to customers, and technology integration is key to doing that.
“Emerging technology solutions have huge potential and can bring a significant shift in the health insurance industry in the coming years,” Mehrotra said.
The company has tied up with healthcare startup GOQii to track health score of customers, based on which they get discounts on health insurance premiums.
Yet, insurers agree that there is still scope to do a lot more.
“To be able to do all home insurance claims online, companies would need to invest to build a complete architecture of homes in the backend for a seamless front-end experience,” said Jain of Reliance General Insurance. “There is potential to extrapolate work done in one area to other offerings.”