IE has run two Predictions 2023 features in December, but here is a different perspective from Assurekit in India. Their full piece is here, but here are some extracts which offer insights into how different the Indian market is, as it moves into an era of less centralised regulation and welcomes overseas investment into the insurance market.
Predictive analytics
Collecting and interpreting data is critical when it comes to predicting customer behaviours. In addition to understanding customer behaviour, predictive analytics can also be used to help improve the accuracy of data.
According to 60% of companies, predictive analytics has increased profitability and sales by reducing underwriting expenses and issues, while two-thirds of companies reported the same result. In addition, direct premiums were improved by 53%, compared to an average of 18%.
Smartwatches can be used to reward those that are truly active every day. This is just the tip of the iceberg it also indicates a future where wearables will be used to sense chronic illnesses, stress and glucose without breaking the skin.
Artificial Intelligence
According to Statista in 2020, 4.2 billion digital voice assistants were in use worldwide, compared to 8.4 billion users by 2024, which exceeds the human population. The insurance industry can leverage large amounts of consumer data to create customized experiences in light of their habits by using AI.
What’s more, using AI can reduce claim turnaround times and underwriting processes by half. Data can be accessed faster using AI tools, resulting in shorter reporting times.
Blockchain
Blockchain can revolutionize healthcare: It can secure medical records while increasing interoperability between health providers. Plus, by harnessing the power of smart contracts, blockchain technology can streamline the flow of information and payments between insurers and reinsurers.
By automating the claims process and sharing information more efficiently, blockchain can save insurers time while reducing the burden on travellers.
So, how are blockchains being practically used?
ClaimShare is an app that uses blockchain technology to combat double-dipping when one claimant fraudulently receives a payout from multiple insurers on the same incident. Once an insurer files a claim, ClaimShare sorts the information related to the claim into 2 categories: personally identifiable information (PII) and non-PII. The non-PII information is then shared in real-time with other insurers using a distributed ledger technology known as Corda.
This information is then passed through a confidential computing platform called Conclave, which runs code to detect fraudulent patterns. Cases of potential fraud can be investigated by linking back to the personally identifiable information of the insurance companies.
Usage-Based Models
Since the onset of the outbreak, usage-based insurance models have become more appealing to consumers. In 2021, there was a substantial increase in usage-based car insurance policies, in particular. Since nobody was driving there was a large awareness of how much money was being wasted on car insurance for vehicles sitting in our driveways. More of these kinds of plans will enable insurance consumers to only pay for what they use, boosting satisfaction and loyalty in return.
How are Usage-based models used by insurers in real life?
SARA Assicurazione and Automobile Club Italia are enticing drivers to install ADAS systems in exchange for a 20% insurance premium discount.
Chatbots
By 2025, 95% of customer conversations and interactions will be powered by chatbots.
A chatbot feature allows the program to walk customers through common questions that don’t require human intervention or send them to the appropriate team member for quicker issue resolution. Chatbots are playing a greater role with insurance companies to streamline customer interactions and learn about customer behaviour online. While insurance is a human-enabled business, we have seen that customers prefer to have the option of tech-enabled processes, whether it is for claims processing or for policy purchasing. Chatbots help businesses give a fast answer or direct a customer to the right person.
Funding
Global – Global investments in insurtech reached $10.1 billion, representing a 38% increase from 2020 and signaling a new historical upswing and consolidation of the market. In fact, insurtechs have received 50% of their all-time funding in the last two years alone.
India specific – India has at least 66 insurtech companies and accounted for 35% of the $3.66 billion in insurtech-focused venture capital invested in the APAC region. According to the report, the Indian life insurance market will expand at an exceptional pace of 6.6% (in real terms) in 2022 and then 7.1% in 2023.
Micro Insurance – phone insurance
In India, a large number of people live underprivileged lives. They do not have access to the financial services they need because they cannot afford them and adding to it in accordance to where they live access to services from banks and insurance companies are less.
Case Study; Ola in-trip insurance
Anyone can get insurance by turning on the toggle in the ola app while they are booking a ride. The option of opting for insurance is available under ‘ride insurance’ when we go to the ‘profile’ tab through the menu. In-trip micro-insurance helps travellers protect themselves against loss of baggage, accidental medical expenses, accidental death or disability, OPD treatment and certain unique benefits such as loss or damage to a laptop.
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