K.V. Dipu, Head, Operations, Bajaj Allianz General Insurance
Can you imagine a leaky pipe in your home fixed by your insurance company when you are away on vacation in Maldives? Can you imagine 72-hour insurance for your hiking gear when you are planning a trip to Kodaikanal? Welcome to the new, exciting world of insurance technology!
On-off insurance (miniaturization and customization made possible by technology): Considered a drab, regulated industry hitherto, the insurance industry is on the cusp of a revolution or disruption. For starters, let us look at Trov, which has made an exciting debut in some advanced markets. The app allows you to tap on / off insurance for the period and items you choose – switch “on” insurance coverage for your beloved beach gear when you go to Goa on Friday evening, turn it off when you return to Bangalore on Sunday evening. When you plan your next vacation at Munnar, turn on insurance coverage for your hiking boots and off again once you are back in Bangalore. And if you need to file a claim, just get into a text-based conversation! Simple and exciting, isn’t it? Sounds so much more exciting than a vanilla, static home insurance cover!
Telematics (shift from asset-based insurance to a combination of user and asset-based insurance, made possible by technology): A doctor who is a teetotaller and a student who loves partying buy cars at the same time. When they try to sell it a few years later, not surprisingly, the doctor wins hands down in terms of bagging a better resale price. Pray, why should the insurance coverage not be different? This is where telematics or usage-based insurance comes in. While your insurance premium depended solely on the car till now, in the future, it is very likely to be a combination of information on the way you drive and the shape of the car. The less risky your usage, the better the price!
Leveraging social media (usage of online behaviour, made possible by technology): A start-up in US & Spain applies your online reputation (such as comments on your tendency to break things frequently by your Airbnb hosts) to assess risk when you approach companies for home insurance, for instance! This is a real case of the power of technology, which enables a correlation between information gleaned from the sharing economy and the classic science of underwriting / risk assessment.
Augmented reality (instant processing, made possible by technology): Yet to be launched, people in the industry are excited about breakthrough developments such as Google Glass. Imagine the opportunity for on-site capability to assess damage, and transmit findings for instant claim processing. It can truly revolutionize the sheer way in which the industry processes and settles claims – the moment of truth in the insurance industry!
W-commerce / digital sweatcoins (24/7 connectedness, made possible by technology): Move over e-commerce, m-commerce will soon be the age of wearables. From devices which monitor your health to devices which detect your surroundings, the power of technology to offer you for instance, ski-based protection, when it detects you indulging in your favourite pastime on snow, to apps which reward you for being physically active with digital sweatcoins with the consequent reduction in your health insurance premium, the power of technology to be anywhere, anytime is really revolutionizing this most traditional of industries.
3D printing (shift from cash to kind, made possible by technology): A unique and revolutionary way to settle claims, 3-D printing (already in vogue in some places) enables faster settlement and replacement or repair of unique and valued items. Done at scale, it can even lower costs and frauds, while enhancing customer experience! A case in point is a high-end jeweller who can create a replica of the lost earring in a much more accurate way than has ever been thought of previously, by using a scanned image of the “un” lost one.
Auto population of customer information / 100% digital (shift from manual mode to digital, made possible by technology): As insurance firms look to increase penetration, a sharp focus on the basics of customer experience is no less important, be it auto population of customer information from databases such as UIDAI, or end-to-end digital processing from proposal submission to policy issuance.
Another distinctive trend of insurance technology is a shift from “me” to “us” is it with regards to simplification or disruption. When customers pay using electronic modes of payment, both the customer and the recipient insurance firm hope the banks have invested in a good customer experience for their net banking customers. The rise of price comparison websites has participating insurance firms praying for 100% uptime of these aggregators.
Insurance technology is thereby enabling firms to stretch boundaries by tapping into a broad array of digital businesses, devices and customers. For firms that are eager to drive change by being at the forefront of technology adoption, it is a golden opportunity to shape markets and change the way we work. A hitherto undisrupted industry is well and surely on its way to simplification, revolution and re-invention!