February 201819 MOVING FROM TRADITIONAL INSURANCE MODELS TO NEW AGE MODELSWhat is common between insurers and healthcare providers? In many countries, it is their low level of perceived trust among customers. Yet, we are one of the few professions that aim at helping people when they are in dire need.What has brought us to this situation? Why a model so simple (i.e. protecting people and helping them to build their wealth) has become so complicated? There are five reasons behind this in my view:1. Insurance is one of the very few businesses where we pay money upfront as a customer, for a service that we may or may not need after a period-of-time. In today's fast-paced world, customers want to see value immediately.2. Because of the high fraud rates in product lines like motor and health, we have to put a customer through a more stringent process (even the ones who are genuine).3. Insurers create products which are highly compartmentalized and specialized. In the bargain, we are perceived to have more exceptions than inclusions.4. Dependence on part-time intermediaries whose interests may not be aligned to that of the customer, a professional intermediary or the insurer.5. Legacy issues stemming from inflexible core systems and resultant processes.This industry is plagued by the legacy systems we are tied to and by a project management philosophy which focuses on project completion and its adoption. We have too many mobile apps in the market with minimal adoption. The simple reason for this is that we haven't talked to the customer or distributor enough before we launch an app. Launching an app in today's market is the easy part. Adoption is a function of management will, customer value, and engagement mechanism designed (i.e. content).New age business model using IoT, RPA, AI, and Big Data helps quash these specific challenges stemming the growth of our industry. With the help of telematics, wearables technology, connected homes, and the like, this industry will move from underwriting on a pre-payment basis to a usage-based industry, similar to utilities like telecom and electricity. As a customer, we will pay bills based on our actual usage during the past month.While some elements are already seen in many markets, we are yet to see a fundamental transformation that encapsulates the concept above. But, I am convinced that we will see this in the years to come. How can this be achieved?1. IoT is at heart of this revolution and helps transform the business model by enabling new interaction models which weren't even conceivable a few years back.CXO NSIGHTSBY ROHIT CHANDRASEKHARAN NAMBIAR, CEO, AXA AFFIN LIFE INSURANCE
< Page 9 | Page 11 >