Changing landscape of life insurance
Mr. Sanjay Tiwari, Chief Strategy Officer, Exide Life Insurance
The world came to a standstill with the coronavirus outbreak of 2019. But given the resilience that the human race is known for, individuals soon learnt to fight backand overcome the hurdles in 2020. The Covid-19 pandemic could well be a watershed moment for the insurance industry in India. Businesses shored up and there was a revival in the Indian economy. The silver lining in the journey was the growth opportunity presented by the insurance sector.
In the last year-and-a-half, there was a fair evolution in the customer preference and behaviour. Individuals started considering insurance as a necessary risk mitigation tooland not just another investment product. This pushed the primarilytraditional and people-led insurance industry to move to digital.
Building on digital assets
The ‘digital first’ approach is slowly changing the way insurers have traditionally been interacting with customers and providing customised services Infact,digital has become mainstream and the entire operating model has shifted to be ready for the “new normal”.This also has helped us to compete against multi-service, low cost digital financial services.We will see growing collaborations between insurers and digital platforms which have the potential to enable more sophisticated online distribution, predictive underwriting and more efficient claims management
The major shift from physical to online and digital modes of life insurance has had a positive impact on the sector. There has been a higher insurance penetration along with greater operational efficiency and a better product-mix, which is tailor-made for different audience segments. Technology has led to better responsiveness and awareness about how imperative insurance is, the regulatory framework, players in the market, and new and existing products and their end benefits.
Insurers today are not only providing an intuitive interface for buying policies in a contactless manner with just a few clicks but are also using technology to conducteasy and hassle-free medical tests. In our company, along with technology that enables month-on-month onboarding of advisors, there has been almost 100% adoption of e-sales. Here, the platforms connect the customer, the advisor, the sales manager and the contact centre simultaneously.
All queries related to customers are resolved through AI-driven chatbots.Further, insurers are making the claims process seamless by using multiple digital channels.All these processes are enabling insurers to take the next step by reimagining physical interaction, thereby maximizing productivity and enhancing customer experience which also included resolving their grievances as quickly as possibleand in a smooth manner.
While there is a quick shift to digitization, the agents will continue to remain the backbone of insurance companies.The reason for this is that people still look forward to personal assurances and prefer face-to-face interactions with agents before investing their hard-earned money.
Diversification of products
The insurance sector is constantly acclimatizing to newer tools and platforms to fulfill the evolving needsof the customers. Insurance players are offering simple and innovative products as a means to provide better and seamless customer experience in the new digital environment.We are continuouslyassessing how product features may need to change as well as how the experience could be tailored to make risk protection relevant in the new normal.There has also been a major shift in attitude from pure product focus to enhancing customer satisfaction with personalized products.This depends on the growing financial need, life goals, and risk appetite.
Underwriting decisions
Over time, life insurance companies have tightened their underwriting norms for protection policies and hiked premium after there was a surge in death claims during coronavirus second wave.In many ways, insurers are increasing their dependency on alternative sources of underwritingusing AI models andadoptinga method of virtual medical examinations.This is poised to have a direct and positive impact on cost and time, thereby making it an imperative part of the overall issuance processes.
Overall, with bounded optimism, looking forward to 2022 as very exciting time for the industry in terms of the opportunity size, increased customer understanding and customer centric,tech-led innovations.
Predictive underwriting
Validation of certain criteria like insurable interest, age, income, sum assured, occupation, and so on which fall under the bracket of risk profiling is conducted to ensure a positive scoring is acquired for better understanding and categorization of the applications. It is a rule-based underwriting method that issues policies directly to the customers based on multiple parameters, post which a pre-approved sum assured (PASA) for certain customer segments allowsthem to buy insurance covers in a hassle-free manner.
At an organizational level, over 95% of our new proposals are now logged in through digital platforms. We are bettering our customer servicing especially in claims management by adopting the best-in-class technology and investing in relevant digital tools. On the other hand, our individual Claims Settlement Ratio is one of the best in the industry at 98.54% (FY 20-21) which is a reflection of our efforts to settling claims expeditiously in a seamless manner.
