The insurance industry in the country is undergoing multiple disruptions in its functioning and the trend will accelerate in the future, a report says.
The insurance industry in the country is undergoing multiple disruptions in its functioning and the trend will accelerate in the future, a report says. The operating and business models of insurers have been evolving due to the disaggregation of the insurance value chain, according to the report prepared by industry body Assocham in collaboration with Ashvin Parekh Advisory Services. Recent technology trends such as artificial intelligence (AI), machine learning, blockchain and robotic process automation (RPA) have significant potential to streamline insurance operations and enhance customer experience, it added. Insurers have begun capitalising this potential of technology to address rising customer demands and expectations. Where the major task has been customer acquisition and servicing for the insurance industry, technology has made it easier to manage the sourcing by way of interactive machine learning and artificial intelligence tools, the report said.
“Three disruptions including technology, financing of insurance companies and the policy and regulations will perhaps pose new challenges for the industry,” Ashvin Parekh, Managing Partner, Ashvin Parekh Advisory Services told PTI. Commenting on the performance of the industry, he said the “insurance sector has done well last year. The disintegration of banking reforms in crop insurance has helped both life and non-life insurance sectors”.
At least four insurers — ICICI Lombard, Birla Sun Life, PNB MetLife and HDFC Life — are already using advanced technology for either customer support or sales. As per the report, the insurance sector has grown fairly well in the past one year, with both life and non-life sectors recording higher than previous year premiums. The average growth rate for the industry has been around 10-12 per cent. However, the growth for the health sector has not been at par with life and other non-life streams.
From the regulatory point-of-view, there have been several positive changes on matters such as distribution channels and introduction of new avenues of capital raising, the report said. IPO regulations have been introduced for the insurance companies. Post introduction of these regulations, several insurance companies have filed their IPO applications. Also, the regulator has opened the gates for insurance companies to raise capital from alternative routes such as preferred share and subordinated debt.