By Ajay Kadyan, co-founder and CTO of Zimyo
No industry has been able to escape the transformation that technology has brought in. From manufacturing companies to banking institutions, every sector is leveraging the benefits of technology to expedite the delivery of their services, reduce costs and errors, and most importantly, manual efforts. And the insurance industry is no exception to such developments. India is the second-largest insurtech market in Asia-Pacific, accounting for 35 per cent of the US$ 3.66 billion insurtech-focused venture investments made in the country, according to S&P Global Market Intelligence data.
Given the complexities in the traditional methods of buying insurance plans, organisations are coming forward with embedded finance services to bridge the gap between the consumer and financial services. Technological advancements, evolving customer needs, and competition in financial services are all driving a new wave of digital financial services.
The market share of private sector companies in the general and health insurance market has seen a significant increase from 47.97 per cent in FY19 to 48.03 per cent. In the life insurance segment, private companies had a market share of 33.78 per cent in premium underwritten services in FY20.
As more and more people are in search of integrated digital experiences it has become imperative for insurance service providers to embrace the digital disruption. Insurance companies need to keep pace with the changing customer expectations. The problem with the traditional insurance buying processes is that they are monotonous and lengthy. This is not something that people find attractive. This is the primary reason why numerous insurance companies are joining hands with tech companies. This collaboration makes it easy to approach customers looking for a smooth hassle-free buying journey.
The insurtech industry is rapidly evolving and below is some of the top insurtech trends that are going to impact employee health benefits:
Increased focus on user experience
The concept of insurance is not ubiquitous. And even if people know the nitty-gritty of buying insurance they skip it because of lack of a proper system. If we talk about traditional ways of buying insurance, then customers usually have to deal with excessive paperwork, long waiting hours, and no support from the insurer. But today, insurers are focusing more on a customer-centric approach. They are turning into coaches to offer online consultation regarding the enrollment and claim procedures. Customers want simplicity and clarity, this is exactly what insurtech is offering them.
Personalisation and data
Have you ever noticed that as soon as you search for something on the internet, you start seeing that thing on every platform you use as an ad? How does that happen, how does the system know what to present before you? The answer is simple- through data. Data is powerful and insurance companies are using this power wisely. Insurance companies can deliver personalised advice, and products or services tailored to their specific needs by using data garnered from advanced analytics and social media platforms. The data from users can be used to reach out to the customers at the right time through the right channels, thus ultimately delivering the right product to the customers.
As per a report, automation can reduce the cost of a claims journey by as much as 30%, which is fantastic. Using outdated methods or tools can no longer serve the needs of the rapidly changing customer expectations. Therefore, it is imperative for insurance companies to adopt digital strategies. Without digitisation, providing customers with a seamless user experience seems clearly impossible. Digitisation allows insurance companies to reach out to customers in a way never seen before. The use of tools such as websites, apps, social media, chatbots, emails, etc. makes the communication between the customers and the companies much smoother.
Artificial Intelligence (AI)
AI and machine learning make insurance processes more efficient. By adopting artificial intelligence insurance companies can identify emerging risks and can easily prevent fraudulent activities and money laundering. AI can significantly speed up functions like data collection, loss assessment, and cost estimation, etc. When it comes to claims management, damage analysis through image recognition, automated self-service guidance, and others, AI is a big help. This enables insurance companies to offer a hassle-free experience to their customers.
Insurance on the go
In this digital age, mobile applications are a must-have for customers. This is because mobile apps offer exceptional user experience, speed, additional features, and easy accessibility to services. Millennials love in-app shopping: 58 per cent of millennials say that they prefer purchasing through apps. Besides making the purchasing process much easier, mobile apps also act as a great point of contact between customers and insurers for any transaction.
So these were some of the trends that are going to transform the way insurtech operates. While insurance companies are sparing no efforts to make buying insurance speedy and hassle-free, many fintech companies are trying to allure the customers by automating financial services and processes. However, it has been seen that these companies are not offering the comfort or ease that embedded finance solutions can offer. This prompts us to say embedded finance is a much more viable option as it allows insurance companies to easily approach customers. On the other hand, customers are more likely to buy from a trusted platform or partner than from a completely foreign entity.