Private players driving growth of insurance sector in India

With the increase in foreign direct investment (FDI) into the insurance sector to 74 per cent in the recent budget, the Indian insurance sector will attract more foreign investments which will augur well for the long-term development of the industry. India currently is the 11th largest market in the world. "However, the country has got an opportunity to break into the top 10 by the end of this year," says Chirag Buch, Managing Partner, SE2 India, in an exclusive interview with Bizz Buzz

Global insurtech market revenue is valued at $5.48 billion in 2019 and expected to reach $10.14 billion by 2025. Although delayed, the industry now appears to be at a key transformation point with many experts viewing the digitization of insurance as the next big opportunity after fintech

Since the time the industry got privatized, it has grown annually at 15 per cent year-on-year. However, it is one of the least penetrated markets in the world at approximately 4 per cent. The increased digitisation should serve in increasing the penetration in the hitherto underserved market

How insurtech companies are powering the future of global life and annuity and enabling carriers to transform the customer journey?

Insurtechs are looking to disrupt this industry with cutting-edge technology to simplify insurance for the insurance carrier, their sales force, and the end-customers. Making innovation readily available and adoption seamless, insurtechs such as SE2 are working at a much-advanced level and are proving to be a cost-effective partner for any insurance carrier looking to leapfrog into their digitisation journey.

How was the growth of insurtech in 2020?

The global insurtech market revenue is valued at $5.48 billion in 2019 and expected to reach $10.14 billion by 2025. Although delayed, the industry now appears to be at a key transformation point with many experts viewing the digitization of insurance as the next big opportunity after fintech.

The pandemic also played a big role in nudging many insurers to accelerate their digital transformation efforts and approach insurtech companies like SE2 to enable virtual interactions in sales and claims, as well as reduce expenses. This has led to the organic growth of the sector.

According to you, what are the trends to look forward in insurtech for 2021?

Some of the key trends that we can look forward to in the year are:

1. Reimagining Customer Experience Journeys – reimagining customer experience journeys will be the key for life and annuity insurers to differentiate themselves and grow sustainably.

2. Data analytics and AI – data is the new gold and methods of sourcing and interpreting data leads to expanding boundaries and garner a competitive advantage to managing risks and identifying frauds.

3. Emerging technologies – complex tasks and lengthy processes will be automated with digitalization and adoption of emerging technology.

4. Innovation – to provide a valuable product to the customer, insurance carriers will rethink their strategies to provide agile and innovative solutions and break away from the traditional models

5. Ecosystem transformation – Insurers will look at transforming their internal systems and the way they interact with their customers with the help of modernisation and automation.

What are the key learnings from 2020 insurance companies should take ahead in 2021?

The biggest learning from 2020 has been that most innovation happens during crisis. The industry has leapfrogged in terms of offering services and solutions during this time impeccably by ensuring seamless service, work from home solutions and hand holding the customer. We have also shown tremendous resilience in the current times. However, it is now time to focus on re-inventing ourselves through innovation and completing the unfinished agenda.

Our focus this year will be on innovation in terms of product offerings, faster time to market for product launches, focus on customer self-service and digitising and innovating the service by upskilling the employees. In a nutshell, we want to invest in the customer at the heart of what we do and provide them exceptional customer experience.

Your views on the Indian insurance market?

India currently is the 11th largest market in the world with an opportunity to break into the top 10 by the end of this year. Since the time the industry got privatized, it has grown annually at 15 per cent year on year. However, it is one of the least penetrated markets in the world at approx. 4 per cent. The increased digitisation should serve in increasing the penetration in the hitherto underserved market. It also provides an opportunity to tailor the products to the needs of the customer and providing solutions rather than product sales.

With the increase in foreign investments to the tune of 74 per cent in the recent budget - it will lead to increased investments in the insurance industry and that can augur well for the long-term development of the industry.

What is SE2 and what does it aim to solve?

SE2, an Eldridge business, is a life and annuities insurance technology and services firm. As insurers continue to tackle both challenges and opportunities with respect to digital evolution, SE2 is helping them future-proof their businesses and navigate this transformation with a digital-first approach. SE2 has a proven track record of enabling technology driven transformations and uniquely combines industry knowledge stemming from its 125 plus years of life insurance heritage. SE2 currently administers nearly two million active policies on behalf of its 25 million clients and has over $100 billion in assets under administration.

SE2 helps life insurance carriers focus on growth. We simplify operations, variablize costs and help bring new insurance products to the market fast.

What products and technology does SE2 provide?

SE2 provides end-to-end services across the value chain. This includes licensing, commissions and distribution support, new business servicing and processing, mail and remittance operations, business controls and regulatory support, amongst a host of services.

It also offers an end-to-end ecosystem for the modern insurer. It helps insurance carriers to leapfrog to digital with its insurance-as-a-service. It is a starter kit that has the potential to combine a fully digital backend and a modern life insurance customer engagement platform.

The SE2 insurance-as-a-service ecosystem contains a large extensive network of industry-leading technology partners across the full range of insurance functionality and digital connectivity.

SE2's solution is a state-of-the-art platform that leverages APIs from the SE2 aurum digital platform and seamlessly connects with the next generation front office and customer engagement solution from life.io to provide insurance carriers with an innovative solution to digitally transform and successfully broaden customer engagement.

SE2's journey in India and the number of employees in India?

SE2 Digital Service LLP aka SE2 India commenced operations in India in March 2019. We currently have about 550 plus staff in Gurugram supporting business process management for SE2's top clients. Our SE2 technology and innovation centre, Pune was set up in August 2019 and has about 100 plus strong workforce responsible for comprehensive technology and innovative solutions in life and annuities platforms.

What's the SE2 India's future roadmap?

SE2 is a part of the Eldridge industries business, a private investment firm, which invests across diversified industries that have a focus on asset management and growth. To keep pace with changing technology, we adopted a major modernization and digitization effort of SE2's platform. The budget for this effort was $70 million plus and the initiative launched in 2016. We call the modernization our 10x10 strategy that will scale the infrastructure in preparation for 10x growth and advance the technology 10 years ahead of the industry.

What are the challenges SE2 faces and how does it handle it?

Since SE2's inception, the company has been on a high-growth trajectory and as the business continued to expand, there arose a need for an overhaul of the platform with the lofty goal to support 10x growth. With the visionary implementation of the SE2 aurum platform, we were able to smoothly sail over this challenge and expand as per requirement. In fact, our platform can continue to support our growth for the next few years.

Another main challenge has been pivoting towards a unified culture with an extremely high-growth company that has grown organically and inorganically with associates joining and centres opening across geographies. However, with the pandemic forcing us to work remotely, we quickly adapted to the situation and became stronger as a team, building a culture that enabled unified growth and sustainability for future.