From push to pull: How insuretech is rewriting India's insurance story
AI, blockchain, and IoT are revolutionizing the insurance industry, taking it from traditional agent-driven models to the digital age of insuretech, making insurance more accessible and personalized.
Picture this: A middle-aged insurance agent, briefcase in hand, sitting in your living room, explaining complex policies to your parents. This scene, once a common occurrence in Indian households, is rapidly becoming a thing of the past. This is thanks to the advent of a new age of insurance, where Generative AI (GenAI), Internet of Things (IoT) and other cutting-edge technologies are more prevalent than ever.
Jefferies research predicts that by 2025, one-fifth of premium revenue for India's health and life insurers could be generated online. That's a significant chunk of the pie moving to the digital realm. But there's more! India's insuretech sector is expected to grow by 17% annually, reaching a whopping $307 billion by 2030.
Now, you might think this digital revolution would wash away insurance agents. Instead, we're witnessing a beautiful synergy between human expertise and technology. Imagine a world where the knowledge of seasoned agents blends seamlessly with the efficiency of GenAI platforms and other emerging technologies. That's the reality insuretech is creating – a best-of-both-worlds scenario where insurance becomes more accessible, transparent, and personalized.
GenAI: Transforming the Insurance Industry
Generative AI (GenAI) has become a cornerstone in the insurtech space, with insurers and brokers leveraging its capabilities to bring more transparency and clarity to insurance products. One significant adoption is the use of virtual assistants, or chatbots, which simplify and expedite the process of identifying the most suitable insurance plans from a wide range of options. These chatbots enhance recommendation accuracy, increase agent productivity, and provide clients with tailored insurance solutions.
While virtual assistants are beneficial for both insurers and brokers, they offer a particularly significant opportunity for insurance brokers. Insurers typically focus on promoting their specific policies, but brokers need to navigate a broader array of products to provide the best recommendations.
GenAI enhances brokers' ability to compare and recommend various options, addressing the complexity and ambiguity of insurance products. These AI-driven assistants help customers understand the nuances of different policies, allow consumers to compare various products from different insurers in an unstructured environment, making the decision-making process more straightforward and informed, enabling consumers to deduce the most suitable product for their needs.
Insurance companies are also using GenAI to support their employees. In life insurance, for example, it might help determine if someone can get a policy without needing a medical exam. This could expand access to insurance for many people. These smart programs even tackle behind-the-scenes tasks. They monitor regulatory compliance, detect potential fraud, and create training materials for staff. All of this contributes to a smoother, more efficient insurance process.
In essence, GenAI is propelling insurance into the future, making it more accessible and user-friendly. It's not about replacing human expertise, but enhancing it, creating a faster, more responsive insurance experience for everyone involved.
While GenAI is reshaping the core of insurance operations, we can’t ignore the potential of other advancements, such as IoT and blockchain.
IoT: Revolutionizing Risk Assessment
The Internet of Things (IoT) is transforming risk assessment and management, particularly in commercial vehicle insurance. Installed devices provide real-time data on location, driving behavior, and vehicle condition, allowing for fairer policy pricing and accident prevention through early warning systems.
In India, while IoT adoption in personal vehicles is still growing, its impact on commercial vehicles is significant. As more manufacturers integrate IoT devices and fleet owners recognize the benefits, we can expect a major shift in how commercial vehicle insurance is priced and managed.
Blockchain: The Future of Smart Contracts
Although still in its early stages within the insurance sector, blockchain technology holds the potential to revolutionize insurance transactions. One of its key features, smart contracts, can automate claims processing and benefit disbursement, significantly speeding up and streamlining the process.
Imagine your insurance policy as a smart contract on a blockchain. When you visit a hospital, they can instantly verify your coverage and process claims automatically. Blockchain has already proven effective in use cases like Digiyatra and is a powerful technology. However, its deployment in insurance remains limited, and widespread adoption will require cooperation from insurers, healthcare providers, and regulators.
The Road Ahead
The future of insurance is being transformed by technologies like GenAI, IoT, and blockchain. Imagine health insurance policies adjusting in real-time based on your lifestyle or filing claims through a conversation with an AI assistant. Just as ordering food or booking a cab has become incredibly easy, getting insurance is following suit. With GenAI guiding you through the process, IoT providing real-time data, and blockchain ensuring secure transactions, insurance is en route in becoming simpler, faster, and more personalised.
While these advancements bring exciting possibilities, they also present challenges. Organizations must navigate data security concerns and an evolving regulatory landscape. However, when deployed responsibly to support rather than replace human decisions, these technologies have the potential to revolutionise the industry.
From improved damage assessment and fraud detection to streamlined claims processing and customer support, the future of insurance in India looks bright. With GenAI leading the charge, supported by IoT and blockchain, the insurance industry is finally catching up with the times, promising a more efficient and user-friendly experience for all.
(Ish Babbar is the Co-Founder and CTO of InsuranceDekho.)
Edited by Jyoti Narayan
