As impact of technology is seen on almost all aspects of life, its impact on insurance is also becoming visible. Technology is helping the Indian insurance retail industry to transform itself and become more customers centric.
Increasing penetration of internet and mobile is transforming the way we live and so as it is transforming the way how we buy and keep insurance policies.
The Processes relating to retail customer engagement and education, product information, sales fulfillment and claim servicing are slowly and steadily moving to the internet based online channel with voice support delivered via call centre.
Digitization is benefiting both insurers and customers in many ways. As now every information is available on our finger tips, we can easily compare all kinds of insurance products available in the market online. It is forcing insurers to offer more competitive and innovative products to remain in competition. It is also compelling them to offer better customer service. Competition is always beneficial for customers.
For instance, insurers are planning to come up with car insurance plans having different premiums depending upon your address in a city. You could be charged more for busy and thus accident prone areas when compared to city outskirts or other sparsely populated areas with good wide roads and ample parking space.
The earlier model of reaching a customer via an agent or a branch office entails higher cost of customer acquisition compared with web and call centre based customer engagement and servicing.
The customer is also benefited as he can easily have a dialog with insurer to seek product clarifications and get resolutions to issues.
For instance, the online term insurance plans has helped to curtail mis-selling by educating the customers that insurance is not an investment product but a pure risk cover. Online life insurance products are also cheaper than their offline counterparts. The lower premiums are due to several factors including, modern and revised actuarial tables of private insurers due to their international data set and experience, increased life expectancy in India, lower intermediation or commission costs, a certain typical profile of the online customer from an awareness and education perspective with insurance companies perceiving them to be low risk, etc.
The way travel insurance products are bought and managed is also changing. A flyer can now buy and self manage and change a travel insurance policy on the internet in sync with last minute changes to travel plans whether due curtailed dates or more days or changed dates.
The internet has enabled not only the insurance companies to offer their products online with full information but has also given rise to demand aggregation websites providing transparent product comparisons both for price and features. With web aggregators, the price or the premium for a policy has remained no hidden item. All the terms and conditions including exclusions are transparently available to all.
Rather than seek a connect with many insurers, a customer may now visit ‘compare and buy’ insurance portals, operated by licensed insurance intermediaries who provide details of all products available in the market for given category. Sites connect online with many insurers and offer the customer immediate product fulfillment in one seamless session starting from the comparison site and ending on the insurer’s site with policy arriving as a PDF attachment in the mailbox.
The buying process gets initiated online with premium payment done via a credit/debit card or net banking. Call centre reps coordinate offline activities like health check up etc which when successful leads to electronic policy issuance via mail. You can also keep all your insurance policies in electronic insurance accounts (EIA), eliminating need to keep policies in physical form.
Earlier, one of the main reasons for claim repudiation has been incorrect or improper and incomplete declaration by the customer. With the introduction of filling up of web forms on the net whose copy may be retained, this issue has been largely resolved. With self data entry, proper and accurate disclosures eliminate any disagreements at the time of claim processing. The storage of electronic data is beneficial for both insurers and policyholders. It leads to lower administration cost for insurers and faster claim settlement for the customers.
Most insurance companies and licensed intermediaries are already serving the customer online for offering information and clarifications, policy renewals and claim initiation and settlement.
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