Top 5 trends influencing the InsurTech industry
By Leandra Monteiro
According to The BCG Insuretech Report, The Indian InsurTech sector is currently on firm grounds which is evident from the 17% and 14% growth that the life and non-life segments, respectively, have witnessed over the last five years. However, in terms of the industry’s actual potential, this is merely scraping the surface.
Dhirendra Mahyavanshi, Co-Founder & CEO, Turtlemint shared, “There is immense opportunity for growth in the insurance industry considering that segments such as life, healthy, and property continue to be underpenetrated. Correspondingly, customer preferences are constantly evolving and technology tools like Internet of Things (IoT), Machine Learning (ML) and Artificial Intelligence (AI), Big data analytics, etc., are adding value across the insurance value chain. Further, the regulator and the relevant government bodies are supporting innovation in the space through initiatives like the regulatory sandbox.”
In the backdrop of such a landscape, he put forth five emerging trends that are likely to shape the Indian insurance sector as we move forward in the aftermath of the pandemic:
Niche and small is going to be beautiful: The InsurTech industry will increasingly have to cater to the nuanced requirements of customers and create bite-sized insurance products that fulfil a specific need or context. This means that we are likely to see more innovative insurance coverage in the form of pet insurance, short-term rental insurance for the host, e-commerce transaction insurance, etc. For insurance companies this entails recognising shifts in consumer requirements, quickly bringing products to market, and ensuring quick course correction, if required.
Focus on value enhancement: Another emerging trend that is slowly becoming visible is a shift from pure play insurance products to a wide range of services and products that can ensure value enhancement for the customer. To that extent, insurance companies need to become a place of ‘one-stop’ solution for consumers to cater to their myriad needs that might emerge before and after the act of purchasing insurance.
Technology tools elevating the entire ecosystem: Big data analytics is helping insurers understand their customers at a more granular level and is enabling them to create customised products and solutions. Companies can also leverage analytics to add value across several streams ranging from customer acquisition and service to pricing and claims assessment, and even fraud detection. Further, AI driven capabilities can help to improve sales conversions while ML tools can help in the claims process by using previous data and images to identify patterns and assess the damage. This will also help in minimising fraudulent claims.
Enhancing the experience of all ecosystem stakeholders: This is going to be a time of partnerships and collaboration. Instead of working in silos, entities are likely to collaborate, innovate, and share ideas and products in order to generate collective value. Technology is likely to form the foundation of such collaborations while the end goal is going to be enhancement of customer experience and satisfaction.
Regulatory support on innovation: The regulator and government bodies are taking cognisance of the transformation that is currently underway in the InsurTech sector and are playing an active role in supporting innovation in the industry. For example, in the recent regulatory sandbox, more than 22 insurers submitted more than 170 proposals (Source: BCG Insuretech Report). Additionally, the regulator has introduced key enablers like allowing life and general insurers to conduct KYC through a video-based identification process and permitting insurers to offer rewards for low-risk behaviour.
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