The insurance industry in India is undergoing a significant transformation driven by technology. Insurtech is disrupting the sector by using technological innovations to squeeze savings and efficiency from the current insurance industry model.
Insurtech is revolutionizing insurance products, services, business models, and processes. It changes how companies operate and deliver value, from customer acquisition to claims management.
The Indian insurance industry has witnessed the emergence of technology-focused insurance companies like ACKO, which are challenging traditional companies with innovative products and services.
Key Drivers of Insurtech Growth in India
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Need for Personalisation
The demand for personalized and flexible insurance products has increased significantly. Customers, especially millennials, want customized products tailored to their lifestyles and needs.
Insurtech allows for the creation of targeted products based on data analytics. For example, ACKO offers customised travel and motor insurance coverage to meet customer needs.
For more information about ACKO Insurance, visit www.acko.com
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Seamless Customer Experience
Customers today expect seamless digital experiences across industries. Legacy systems and processes of traditional insurance companies cannot meet such evolving expectations. Insurtech solutions use technologies like AI and ML to provide easy customer onboarding, frictionless claim settlements, and 24/7 customer support.
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Emphasis on Preventive Healthcare
Insurtech is enabling a shift from a reactive claim-based model to preventive care. Wearables and health monitoring devices are being integrated with insurance products to incentivize policyholders to healthy behavior.
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Rise of the Digital Customer
Customers now prefer exploring and buying insurance products through digital channels. New-age insurance companies have innovated to tap into this digital customer base by building online platforms and apps with transparent products, pricing, and resources.
Key Insurtech Trends Transforming the Indian Insurance Industry
Let us have a look at some of the critical technology innovations by insurance players that are disrupting conventional insurance models:
Hyper-Personalisation of Products
Data analytics from sources like IoT devices and wearables and information like medical history and claims data enable precise underwriting and customized products.
Micro and Bite-sized Insurance
Consumers today perceive insurance policies as complex financial products with longer tenure commitments. However, insurance products like micro-insurance and short-term covers are changing this perception.
Digital Distribution Channels
WhatsApp chatbots, online insurance marketplaces, self-service apps and more are the new-age distribution channels for insurance. These platforms also assimilate services like claims assistance and document verification to facilitate faster policy purchases.
AI for Claims Management & Underwriting
ML algorithms can accurately verify documents, rapidly process information from various sources, and even predict future claims fraud. This brings immense efficiency to previously manual and, hence, slow functions.
Usage-based Insurance (UBI) Pricing
Due to telematics integration with P&C insurance products, policy premium adjustments are made in real-time based on usage-as-you-drive and pay-how-you-drive auto insurance plans, which leverage UBI for flexible pricing based on metrics like mileage, acceleration and braking.
Preventive Healthcare Approach
Policyholders can now access health monitoring tools, diagnostic partners, fitness apps, and health content. Usage prompts rewards in the form of lower premiums or additional coverage, incentivising consumers to stay healthy.
Direct-to-Customer Approach
While earlier, digital was equivalent to aggregator-led online distribution, insurtech has made end-to-end digital insurance possible. For instance, ACKO sells its insurance products directly through its website and app without any middlemen, thereby improving margins and the customer experience.
The Way Forward for Insurtech
While insurance firms have led innovation based on new-age technologies, collaboration opportunities exist between insurtechs and incumbents to benefit customers.
Concepts like open architecture and API enable insurtechs to integrate more easily with legacy systems. The future looks exciting as insurtech unlocks much-needed insurance penetration-driven financial inclusion with innovative distribution and underwriting models.
Accessible and affordable insurance made possible by a thriving insurance sector will be vital in covering risks for the underserved segments, thereby securing the health, assets and lives at scale.
