Pankaj Pandey, Head – IT, SBI General Insurance
Insurtech is nothing but an aggregation of the technology in the insurance business. Right from the initial days of the industry, technology has been used for increasing operational efficiency and reaching out to the masses. LIC was the early adopter of technology. We need to reach out to the masses and their minds using technology to persuade them to buy insurance. Even after the privatization of the insurance sector, insurance penetration is still low in India - just 5% for life insurance and 1% for general insurance. Insurance is not a normal business; it has a social obligation.
Physically reaching to the rural areas is a difficult job. We have to take care that insurance is be sold to the rural masses as per their needs, and not as per the needs of the insurance companies. There are so many things happening in microinsurance and the companies need to focus on how easily a rural person can purchase insurance, pay the premium regularly and avail the services without hassles and finally ensure that the claims are settled easily. In all these areas, technology can play a major role. For this, insurance and insurtech companies must join hands and find ways to create use cases that gainfully provide insurance to the people who require it.
The greatest hurdle in microinsurance is the cost to sell the policy and to service the policyholder. These expenses impact the premium and if the premium becomes high, then it is not beneficial to the insured person. We must examine how insurance can be sold and serviced at the minimum expense. Selling insurance with a loan product is one option, but it should be voluntary and not by force.
It is necessary that insurance products are designed in a simple manner and the person wanting to buy an insurance policy should clearly know that if he pays x amount as premium, he will get y amount as cover and if he survives the policy period, he will get z amount. If we complicate the products and use jargon, people will get scared to buy the insurance.
There is lot of data available, it is for us insurance companies on how to use it. There may be need for tie-up is with different industries and government bodies for this. For example, if the data with the insurance companies is co-related with the data that is there in regional transport authorities, then the number of vehicles without insurance can be brought out this can be an opportunity for insurance companies to sell vehicle insurance policies. Useful data is there in abundance – for example social media, branded stores, etc.
A certain level of data exchange is already happening in the insurance industry. We are already using data available with credit rating agencies for risk management. However, for some types of data, laws are very stringent that even within a group company, we may not be able to exchange data.
Alpesh Karnik , Vice President Digitalization & Salesforce Automation at ICICI Prudential Life Insurance Co
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