While many Indian insurers have adopted various digital technologies, primarily mobile-based touchpoints for their customers and distributors, the potential of digital technologies to significantly affect their operations and customers has not been explored yet, says a report presented by the international professional services firm, PwC, and Confederation of India Industries (CII).
The report, entitled “Evolving considerations for the Indian Insurance Industry”, notes that various means of engagement are being tried out in the form of mobile advertisements, marketing campaigns and push messages about products. However, a meaningful conversation with customers has not yet been initiated. Insurance products have even fewer touchpoints with customers, except for renewals and claims if required.
In this scenario, insurance companies can leverage their tie-ups with their distributors and explore other businesses to cross-sell opportunities, driven by a digital operational backbone. This can help to bring together insurers and other businesses to cover specific risks (One Need, One Product), suggests the report.
In the digital context, the customer acquires a complex digital identity. For organisations, understanding the identity and delivering customised outcomes becomes a priority. The organisation has to continuously innovate and adapt to new business models. This can be often achieved with help from the larger eco-system by building a network of partnerships. Such partnerships are loosely coupled through digital channels and can enable growth of penetration for insurance companies.
A PwC survey indicates that customers are willing to buy insurance policies from banks than from any other business. However, digital technologies will enable a low transaction cost platform on which other businesses will also be able to sell insurance products.
Today, businesses entering the insurance distribution arena are varied and can range from post offices to Internet retailers and social networks. However, digital developments are a means to an end with customers as a centrepiece rather than an end in themselves, says the report.
The fore-runners in the digital arena are looking beyond sensors and Big Data analyses as simple pricing tools. Their aim is to develop a new generation of information-based services through focused analyses and organisational collaboration, to understand unconnected data collated by these digital tools. They want to provide advice on high-margin proactive risk and its prevention. And by the time the followers catch up, the market will have moved on!
The report says that analytics techniques available today can be great assets in the hands of practical insurers, since these can be utilised to accurately predict a population’s propensity for claim-related fraud. Their use can lead to development of products that are simple, have little or no exclusions or caveats, and enable almost instantaneous payment of claims.