The insurance industry in India saw a growth spike after privatisation, but the penetration of products still remains low. IT major IBM’s ‘Insuring India’ study delved deeper into this situation.
Meera Srinivasan, Executive Director & Partner, BFSI, IBM India / South Asia in interaction with Moneycontrol, talked about how Indian insurance companies can make products more customer-centric. Excerpts:
Q: What are the factors for low insurance penetration?
A: India has an insurance penetration that is not in sync with its growing status among top global economies. This is primarily due to lack of customer-centric insurance solutions; lack of awareness on the importance of insurance versus other options, and lack of reach to the needy customer segments. Apart from these, the right price for the solution, and trust plays a key role to attract repeat buyers.
Q: Technology intervention has been made across several levels in insurance. Where are insurers lagging behind?
A: Insurers need to accelerate development and differentiate trajectory to double their growth in half the time. A product-focused mindset instead of policyholder based outcomes, allowing traditional models to dictate future strategies, and inability to scale innovations beyond experimentation are some of the key areas to overcome for some insurer. The most important area is the lack of recognition of the key role partner ecosystems in the near future and hence readiness towards the same.
Q: InsurTech is being referred to as the next big wave? Considering connectivity issues in India, do you think it could face implementation concerns?
A: InsurTech does not necessarily mean the use of digital that is always online. India has several semi-urban and rural pockets that thrive on technologies adaptable to both online and offline modes.
It is important to become a digital enterprise and evolve with the environment. Offline modes are quite progressive compared to physical modes of operation and are a good precursor to a fully connected mode. It is important to design keeping in mind the ideal state and ensure a rapid adoption strategy with improved connectivity. Having said this, good connectivity across all regions will pave the way to faster insurance penetration.
Q: Insurance is considered a push product. Can technology help bridge the gap?
A: The leaders among insurers are realising the need for a customer-centric approach to designing insurance solutions which will tilt the scale towards insurance becoming a pull product when coupled with other factors such as awareness, appropriate pricing and convenience of service.
This requires an insurer to achieve sufficient adoption across the value chain of channels, customer segments, and entities that are a party to the on-boarding journey. With the use of deep learning and analytics, customer choices can be predicted and with zero intrusion. Quantum computing can be used to deploy an enormous amount of supporting data to discover segments and match requirements and thereby create new avenues of cover.
Q: Could a mobile-only insurance company be a reality in India?
A: Absolutely. Innovators among insurance companies can focus on markets with specific needs and ensure that a relevant eco-system is provided digitally.
Even today many insurers are redefining their journeys to suit a digital ready segment. It is a reality today for certain products.
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