AI-driven chat bots transforming life insurance industry: Max Life Insurance

The life insurance industry is not only investing in building digital ecosystems, but also driving greater insurance adoption with support of digitally enabled sales channels. "Voice, video led assistance, AI driven chat bots have proved to be a real game changer in transforming the way insurance businesses are reaching out to the customers for servicing and cross selling," says Manu Lavanya, Director and Chief Operations Officer, Max Life Insurance in an exclusive interview with Bizz Buzz

Customers want brands to empathize with them and connect emotionally. This has led to a broader belief that the best-in-class processes in life insurance need to be a hybrid of "High Tech - High Touch" approach. Insurance companies are hence investing in tools and processes that can seamlessly switch from unassisted to assisted modes of customer interaction based on the stage of the customer journey. Additionally, with the pandemic restricting the movement of people, digitalization of processes has become imperative. This has also provided life insurers with additional touchpoints to reach out to customers per their convenience and demands

Digitization is playing a key role in present world. How is it helping the life insurance sector?

Digitization is now at the core of creating a unique customer experience. Life insurance has successfully adapted to this trend where all customer interactions right from lead generation to fulfilling the promise being digitally enabled. The industry is not only investing in building digital ecosystems but also driving greater insurance adoption with support of digitally enabled sales channels. Voice, video-led assistance, AI driven chat bots have proved to be a real game changer in transforming the way insurance businesses are reaching out to the customers for servicing and cross selling. At the same time, analytics and machine learning have enabled life insurers to better drive fraud prevention, Intelligent Underwriting and risk management and process automation.

Across all channels, 100 per cent policies come to Max Life digitally, it gets underwritten through AI/ML-based solutions, which recommend an underwriting decision. As a result, more than 60 per cent of the retail portfolio is underwritten without need of a human underwriting intervention. This is just one example of many traditional processes in life insurance business that are being disrupted by digital transformation.

The rapidly changing consumer behaviour is reshaping the insurance industry. How are insurance companies seizing this opportunity?

Today, several aspects have evolved customer behaviour due to the pandemic. Personalized, flexible and on-demand products and services are the need of the hour. Life insurers are catering to these requirements by enhancing customer journeys to become more customized, self-serving, and intuitive.

Moreover, customers want brands to empathize with them and connect emotionally. This has led to a broader belief that the best-in-class processes in life insurance need to be a hybrid of 'High Tech - High Touch' approach. Insurance companies are hence investing in tools and processes that can seamlessly switch from unassisted to assisted modes of customer interaction based on the stage of the customer journey. Additionally, with the pandemic restricting the movement of people, digitalization of processes has become imperative. This has also provided life insurers with additional touchpoints to reach out to customers per their convenience and demands.

Can you list down changes in consumer behaviour that alter people's approach to life insurance, especially in pandemic times?

Covid-19 has further highlighted the need for higher term insurance awareness and closure of the protection gap that exists in India. Customers are now more aware of life insurance and its importance to build financial resilience. They prefer investments in protection (term) products and guaranteed plans to secure the future of their loved ones in these uncertain times. As per our India Protection Quotient 3.0 survey in association with Kantar, urban India registered an increase of 7 per cent in term awareness (last year).

The pandemic also witnessed an increased expectation of the policy holders to be able to self-serve their needs at a location and time of their choice. This has further accelerated the efforts of life insurance companies to drive 'digital for self-serve' programs for their customers. Apart from this, a growing focus on bettering the health and retirement ecosystem by providing guaranteed income through annuity plans is a big rock that the industry is looking to nudge forward.

From a digital standpoint, what are your business targets?

For Max Life, our vision is to become a 'digital first' life insurer that creates world class customer experiences through robust infrastructure that fosters innovation. In particular, the successful adoption and implementation of digital initiatives backed by our partners and agent advisors' performance have helped us deliver a strong start to the fiscal and continue the momentum. We have also brought a deeper focus into digital commerce to make ourselves more attractive to young, millennial buyers, with more policies sold and bought through the online route. Our e-commerce business has seen a 44 per cent CAGR over the last three years, and we will continue to build momentum on our Direct-to-Consumer channel. One in three term policies that are bought online in India are bought from Max Life and our long-term strategy is to further expand the share of digital sales channel and extend the market leadership of online sales from term to savings portfolio as well.

With digital as the core of our operations, we've significantly invested in a three-year transformation roadmap. We have put together a stack of cloud, data, infrastructure, artificial intelligence, machine learning, and automation to become a leading industry player in the digital-led business. Today, nearly 77 per cent of all our business transactions are self-serviced. Our goal is to take it up to 90 per cent in the next two years. We intend to increase automated underwriting of non-term policies to 75 per cent and also want to address 90 per cent of incoming customer service requests without human intervention.

Any digital investments in the pipeline?

We will continue to accelerate our vision of becoming a digital first insurer. The aim is to invest in digital platforms and digital marketing to retain our leadership business in online term business. We will further harness our capabilities to embed intelligence, leverage insuretech ecosystems and bank integration to reduce friction in our journeys. To offer an Omni channel customer experience, we are creating a cloud-based customer data platform and cloud-first IT infrastructure to build a solid foundation needed for creating an intelligent enterprise. We will also continue to invest in process automation, enterprise workflows, HR self-service apps and enterprise portals to build a world class experience for our agents and associates.

Trends that you have seen in the recent past?

While overall sales of life insurance were stunted in the first half of 2020 due to the pandemic and accompanying shut-down, both term life and whole life products are expected to grow in 2021 and onward. That trend will be aided by higher vaccine uptake and technological advancements that enable a smoother and more efficient application process. Some key trends that have emerged in the past and are expected to continue in near future include:

l The pandemic is likely to increase consumer demand for life insurance products in 2021 and beyond

l Consumers are also expecting faster turnarounds, leading to more enhanced automated frictionless onboarding journeys

l There will always be a need for the right blend of technology and human interface to drive the right experience for the end customers. 'Phygital' will be the way to go in life insurance industry.