- In the last 10 years, the insurance industry has adapted itself to the fast-paced internet world and has become hassle-free.
- Pushan Mahapatra, MD and CEO,
SBI General Insurancewalks us through the evolution of insurance sectorand shares what the future of digital insurancein India will look like.
Since its inception, insurance industry has grown stronger as the sector adopted itself to increased awareness, innovative products, and more distribution channels. Though there has been a growth in premiums at the industry level, the insurance penetration level in India is still very low as compared to other countries in the world, thereby providing ample opportunity for all insurers in the ecosystem to grow.
With over 460 million internet users, India is the second largest online market, ranked only behind China. By 2021, there will be about 635.8 million internet users in India, most of the digital population in India are mobile internet users. This has resulted in people who are adopting more digital mediums to interact and with the backing of the government to push for the digital India movement, the insurance industry is also adopting digital technologies in presence.
The use of web-based technologies as an Insurance service delivery medium has added new elements to service dissemination. Escalation in self-service technologies has provided customers with multiple choices for using the services offered by insurers. The online service attributes of ‘convenience’ and ‘ease of use’ are being given priority by insurers for designing web-based services
Future of digital insurance
New digital platforms support micro duration and atomisation of insurance by item. In a digital era where the customer needs are ever-changing, insurance providers need digital infrastructure to introduce, evaluate, and adopt new products/technologies/business models. Building such infrastructure in-house will be costly and slower. Integrating with third party systems like hospitals to evaluate medical data for underwriting, evaluating the wellness of a policy holder in terms of fitness and his need during the entire customer lifecycle would ensure better products and pricing. Also, use of telematics systems in auto-insurance would change vehicle insurance from class-based pricing to driver behaviour-based pricing. Distribution through E-Tailors, Web aggregators and fintech companies are expected to witness an upward momentum in coming years
In addition, Insurers in India are gradually adopting digital medium to provide their services keeping in view the millennials as well as rural penetration. Use of digital medium instead of physical distribution are much more feasible for them to reach out to the end users as well as increase insurance penetration.
We are also witnessing improved quality data (IIB, IRDAI) availability for insurers for better underwriting decisions and service efficiency.