Insurers changing tracks in line with trends

Insurers are exploring newer B2B channels to ensure feet-on-street activity is reduced as far as possible. However, the nature of the business will always demand human interactions and customer engagement, perhaps at higher costs

What an extraordinary year that was. The kind of changes Covid-19 has unleashed on planet Earth has perhaps never been experienced before. Human lives have been tossed around and so have businesses. With the announcement of the nationwide lockdown in March last year, organizations had to make overnight adjustments which seemed unimaginable before the pandemic struck.

Insurance, as an industry, realised very early on that the 'change or perish' principle was here to stay. As an intangible monetary promise, insurance policies have always been push products to sell. With the added complexities of remote access to customers, the process became more challenging. Companies quickly changed tracks and equipped their sales force with effective digital toolkits enabling them to engage with customers comfortably despite the social distancing norms. At the same time, organizations adopted the remote working model and the phrase 'Work from Home' was no longer an exotic expression.

The second wave of Covid-19 has followed exactly a year after the first one and right at the beginning of a new financial year. However, insurance companies have not lowered their guard. They have, in fact, gone ahead and built on the digital gains of the previous year. We expect the following trends to form bulwark of the progress that the industry seeks as we move forward in the financial year.

Deep understanding of a complex market

Considering the real challenges that lie ahead in this pandemic-affected market, possibility of churn within the sales force is a concern for the industry. In such a situation, hiring new talent may become a cumbersome task. With livelihoods at stake, selling policies in new markets may also become challenging. To deal with this, insurers are exploring newer B2B channels to ensure feet-on-street activity is reduced as far as possible. However, the nature of the business will always demand human interactions and customer engagement, perhaps at higher costs.

Cloud computing

With so much uncertainty looming over companies due to the pandemic, insurers will be wary of sinking precious capital into on-premise infrastructure. The entire enterprise grade IT industry is slowly but surely leaning towards the cloud platform. With leading cloud service providers setting up data centres within the geography, regulators have also given their nod on moving sensitive consumer data to these new platforms.

Data-driven operations

Customer segmentation, focussed selling, life-stage based cross and upselling, retention strategies, agent productivity, product bucketing – these are approaches that can be fructified only if insurers build on the huge data capital that they are currently sitting on. Add to this the rich unstructured data coming out of call centre dialogues, website browsing patterns and even social media posts. Insurers will have to continuously invest on building intelligent data blocks to fuel their AI-driven analytic engines bustling in the background.

Artificial intelligence

It will be no surprise if insurance companies continue to sharpen their AI tools this year as well. From online underwriting capabilities and claim processing to predicting early claims and creating propensity models, Artificial Intelligence will level up into advanced stages during the course of the year. AI will also help organisations look at business problems through different prisms. Fraudulent claims continue to be a concern for the industry and there is considerable evidence that proves how AI capabilities can help insurers in differentiating good apples from the bad.

Robotic process automation

Insurers are expected to compete with other industries for human capital as the economy tries to break out of the shackles of Covid-imposed exigencies. Trained human resource will come at a premium, prompting most companies to look at expansion of the role of Cobots (Colleague Robots) in their organisations. Cobots and Human work forces will continue to evolve within the same team functions, and more and more basic tasks will go to robots as the year progresses. Platforms such as UI Path, Blue Prism, Automation Anywhere, Pega and their likes will continue to prosper this year as well.

Machine learning

Similar to AI and RPA, Machine Learning will continue to expand its footprint in the Indian insurance industry. Most insurers have been experimenting with this modern technology for a couple of years now. ML will continue to make big strides with more structured data being fed into their learning engines mostly on claims, early detection of fraud, customer behaviour, sales churn and so on. These are important parameters for long-term growth and profitability of all insurers. It's safe to say that this year will continue to see more investment into the advancement of such models.

Tailored product portfolios

Customers, across industries, are now spoilt for choice given the increasing consumerism. Segmentation, customer proclivity and life-stage management will remain the buzzwords for customer engagement even this year. Customized products based on customer type will see increased demand. This will be led by strategic investments in areas of AI-backed data extrapolation on advance analytics models. Today's customer expects insurance companies to take into account their lifestyle and propose tailor-made products. Product teams will continue to seek analytics inputs while designing such experiential products for different customer segments.

Cyber security advances

Companies will continue battling with cyber criminals. As more and more market operations go digital, cybercrimes may continue to plague all industries, including insurance. The Indian customer is starting to become more alert towards the possibility of frauds in the digital world. Insurance companies, along with the regulator, will continue to invest big in providing security to sensitive personal data of customers. Additionally, the Indian government is taking multiple proactive steps to protect financial transactions from prying eyes.

With this, the insurance industry is expected to implement advanced technology across key areas to improve business operations and further enhance customer engagement.

(The author is Chief Technology Officer at Exide Life Insurance)