Integration of Technology in the Insurance Sector
With the rising digitalization and business expansion due to the growing globalization of economies, today as there exists prolific opportunities for positive growth, while the risk follows, there’s plenty of reason to buy the insurance care plans. Additionally, where the demand for personalized insurance offerings is creating a rise for usage-based insurance as a primary business model, technology as disruptor has been effectively shaping the insurance industry and will continue to redefine it. In a recent conversation with the Editor of Silicon India, Amit Tiwari, Co-Founder & COO, Xceedance shared his insights on the impact of technology to redefining the Insurance sector.
What are your thoughts on the current insurance industry in India and abroad?
According to the ‘Straits Research’ report, the global Insurtech market was valued at $3,774 million in 2021 and is anticipated to grow at a CAGR of 46.10 percent by 2030 to account $114 billion.
The Indian market trails more established markets like North America and Europe in the insurance tech space, but it is quickly gaining momentum. Innovators in China and India appear to be best positioned to move beyond a supporting role and challenge the region's industry incumbents, according to S&P Global Market Intelligence analysis. This report also states that India is the second-largest insurance technology market in Asia-Pacific, accounting for 35 percent of the $ 3.66 billion insurtech-focused venture investments made in the country.
How is technology enabling smooth functionality for insurance businesses?
Every aspect of our world has been altered by technology, which is arguably the most significant factor in altering human requirements and business practices. The insurance industry is no exception. The leaders in the insurance industry have begun to move toward cutting-edge technologies that will assist them in becoming more customer-centric and achieving operational excellence. With the help of technology, insurers can now easily implement successful business strategies for entering or expanding into emerging markets by increasing their size, increasing their growth rate, and placing a greater emphasis on various aspects of insurance. New technologies like cloud computing, AI, ML, advanced analytics, the global positioning system (GPS), and telematics are providing new ways to measure and control risk, connect with consumers, and broaden insurability.
Tell us about the various technologies that are disrupting the insurance business. Also, how are they enabling the companies to offer hassle-free services to their customers?
Technology's benefits to businesses in the sector often reflects its widespread adoption in the industry, sometimes without obvious effects on customers. While that is not the case with AI in the insurance industry, which does benefit customers. Today's most disruptive technologies in the insurance sector include artificial intelligence, data extraction and analytics, robotic process automation, and low-code/no-code platforms.
- Artificial Intelligence (AI): Insurance firms benefit from AI by streamlining essential strategies, increasing productivity, and improving customer service across all client touchpoints. Insurance companies will be able to better understand their customers with the help of this data, opening the door for tailored product and service offerings, pricing, and faster service delivery.
- Data Extraction: The selection of risks, administration of policies, underwriting procedures, claims, analytics for loss modelling, evaluation of insured assets, and regulatory reporting can all be enhanced with better data access. Strong data extraction models can be produced using IPA (Intelligent Process Automation), NLP (Natural Language Processing), and ITI (Intelligent Text Ingestion) technologies.
- Big Data/Analytics: Insurers can develop meaningful consumer interactions and an improved understanding of risk in distribution, underwriting, claims, and customer service by securing both unstructured and structured data for analysis. Advanced analytics can be used in actuarial practise to establish premiums, manage portfolios (including propensity analysis and loss prevention), and assess & estimate unpaid claims.
- Robotic Process Automation (RPA): RPA makes it possible to automate repetitive but complicated procedures and tasks, which frees up resources for more strategically important work, boosts throughput, decreases turnaround time, and improves the overall efficiency of insurance operations.
- Technology with Low-Code/No-Code: Low-code/no-code technology is ground-breaking because it makes it possible for non-programmers to develop applications more quickly than with conventional methods. This provides companies with countless options for designing and managing software applications and insurance products, including networking, connectivity, and rating algorithms.
The development of better client interactions, enhanced connections, and more efficient procedures will be the result of insurance companies looking to new technologies.
What impact has the ongoing digitization phenomena created on the insurance business? How is it making insurance more affordable and accessible to customers?
Digital transformation is now a global phenomenon that has an impact on all economies and industries. The insurance industry is one sector that has benefited greatly from digital transformation. The advantages for the insurance industry include:
• Shorter policy creation cycle: Insurance providers can now streamline their workflows, thanks to digital transformation as the time it takes to develop a new policy has significantly decreased.
• Increased sales: Digital tools and interfaces have simplified the insurance buying process, allowing customers to purchase coverage online and without the administrative hurdles previously required. This makes it easier for insurers to sell to new customers outside of traditional markets.
• Improved Risk Assessment: Insurance companies are now able to offer individualized policies thanks to the utilization of data and analytics for a deeper comprehension of their clients.
The insurance industry has begun moving toward a customer experience (CX)-oriented model. Presently, 90 percent of insurers have a C-suite position (like Chief Customer Officer (CCO) or Chief Customer Experience (CX)) dedicated to the customer experience, with 85 percent of insurers reporting they use CX initiatives throughout the customer journey.
In your opinion, how will the insurance industry evolve in the days to come? What opportunities do you foresee?
According to a recent report, rapid economic expansion and a focused regulatory push will help India become the sixth-largest insurance market in the world within the next ten years. Insurance companies recognize the opportunity this presents and are doing everything in their power to jump on the technological bandwagon as technology adoption continues to rise across all industries. However, technology alone won’t push them to the front of the line, instead, these technologies can facilitate data-driven, secure, and automated services (like fraud detection and claims processing) which will help them stand out in a crowded and increasingly competitive market.
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