Digital transformation is revolutionising every Industry and insurance is no different. From following an agent driven model, the insurance companies today are going through digital metamorphosis in order to optimize the end-to-end customer experience. In terms of technology, there’s a forward movement in the insurance sector, and customers are delighted that insurance companies are hopping onto the digital age.
For insurers, digitization helps in expanding their footprint and leveraging low-cost digital distribution channels for sales and service, which eventually deepens their market penetration.
Minimal Intermediary Intervention
Ask your parents on how they availed an insurance policy and the most common answer would be from an agent. And, it wouldn’t be surprising if these agents were friends and acquaintances. However, with insurers going digital with their services, the intervention of agents has come down to some extent.
Today, prominent insurers have made online provisions whereby you can avail the policy that you need. In fact, there are many insurance aggregator websites which list plans from multiple insurers to aid you in your choice. Once you have chosen the plan you wish to avail, all you need to do is to fill up the online proposal form and pay the applicable premium.
The information is directly fed in the insurer’s database and with no intermediary involved, the insurer saves on agent commission, the benefit of which is passed to you in form of lower premiums.
Chatbots have been a major disruptor in the insurance industry. Combining artificial intelligence with machine learning and analytics, chatbots are computer programs designed to interact with you and solve your queries. The ‘digitization of human communication’, chatbots help you understand various products on offer and are at your services 24×7.
Modern chatbots which are deployed by insurers on their websites or social media platforms not only answer specific questions but can also suggest products based on your need. For example, if you are recently married and want a protection for your newly dependent partner, the chatbot can suggest appropriate protection plans.
Gain from Responsible Behavior
Digitization gives insurers crucial data and insights on your lifestyle that could come handy while purchasing a new policy or renewing an existing one. For example, through smartwatches and telematics, health and auto insurers are able to capture crucial metrics on your daily activities and driving behavior and point out areas which need attention.
At the same time, you get vital stats on health, essential for taking corrective measures, if required. Additionally, you can be rewarded for adopting healthy and responsible behavior when it comes to lifestyle in form of lower premiums or a higher sum insured.
Bring Down Mis-Selling
Mis-selling of insurance products not only diminishes customers’ faith and confidence in insurance but also seriously weakens the business of insurance companies because if mis- selling is proved then an insurer will have to compensate the customer.
However, with digitization there are fewer chances of you being mis-sold as you can read reviews and features of a product to understand whether you actually need it or not. On a digital platform, you can even talk to experts or mail your queries for an unbiased opinion.
Quick & Easy Claim Settlement
Digital exchange of data on cloud-based platforms leads to quick processing and settlement of claims. Today, on initiating a claim digitally, you can fill the claims settlement form online, attach the relevant document(s) and send it within seconds to your insurer. In the case of unplanned hospitalization, the digital route allows you to settle the health insurance claims quickly.
Digitization can prove to be a game changer for the insurance sector. According to a BCG survey, by the year 2020, digital insurance will grow by 2,000 per cent from its current state with a total turnover of Rs. 15,000 crore. Furthermore, it is also said that in 2-3 years, 75 per cent of insurance purchase decisions will be powered by digital channels. To make the most of this rapidly evolving ecosystem, insurers would need to consistently reinvent themselves and develop a data first mind-set.