The Editor had a read through the India Insurtech and Boston Consulting Group Report, published recently. What can we lear from the rapid transformation of the very traditional Indian insurance market over the last few years?
The first thing that strike you are how distribution of products remains a sticking point. This is still a market that is highly regulated, relies on local agents to some extent and has only just allowed overseas companies to own significant percentages of local businesses. Indian insurtechs have attracted a huge amount of VC on potential, not reality. It’s impressive that two `unicorns’ have already emerged, more will follow. People are betting big on a huge market, ultimately over 1.6 billion consumers are out there, so it’s understandable. But is India itself ready for an online, 24/7 digital experience that cuts out the local agent, the endless paper admin and things like regular, small cash premiums? Maybe.
INVESTMENT & GROWTH AREAS
The European insurance investors are now pumping cash in, compared to the US banks and funds back in 2016. The money keeps rising in terms of volume too, as we can see from the graphic.
The report notes that just 3% of Indians have Life cover, so there has to be room to grow, especially using embedded cover – such as a bit of basic Life cover with an electric scooter/car, job etc – or more innovative marketing. It’s interesting that 54% of decision makers in households are women, so there is scope to sell the idea of long term healthcare too, a safety net for the family.
As regards upselling/cross-selling, the report notes that where AI has been deployed in terms of personalised offers online, there is an uptake of between 20-50%, which is very high. The online audience is receptive, but relevance to lifestyle is the key. India is becoming affluent and cities are gorwing fast, so the opportunities are there for insurance brands who offer protection for a new lifestyle, and it could be rental, rather than pure ownership.
FASTER CLAIMS & STACKS OF DATA
There are several case studies in the report, which highlight how insurtech solutions have been used to resilve problems in the market. For me, the best one is Eigenlytics shift from paper claims, or electronic docs, AI scanning and a 95% – yes 95% – percent reduction in settlement time. Claims costs were reduced by 70% too, which demonstrates how big the savings are, still, in the Indian market.
The other thing worth noting is that the report touches on the new National Health Stack, being rolled out by the Modi government. This is a back way of introducing a compulsory digital ID for every citizen, but it will also track health records with more accuracy long term, and accrue useful data over time. Insurers who want to know more about health risks, treatment costs, rehab, city vs rural demographics, maternity provision, employee plans and much more, will definitely want access to this data stack.
You can download the report here by the way.