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Disseminate Life Insurance By Employing Technology

by Manoj Jain, Director& CEO, Shriram Life Insurance September-2016

India still continues to be grossly underinsured with insurance penetration around 3.6 percent much below the global average of 6.2 percent.  Large sections of our population more so in the rural and semi urban areas remain uninsured.  With the changing regulatory landscape and the ever dynamic market environment, insurance companies need to reinvent themselves continuously to keep pace with the preferences of the customers.

Keeping in line with the diversity in India, Life insurance customers also fall in a range of technology adoption in life insurance buying and servicing. On the one hand, we have the young tech savvy urban customers, who are fully wired from doing research on their requirements, online purchases and servicing. The  product  and  service  delivery  models  must  be  able  to  meet  the customers’ changing needs and expectations because they are becoming more and more self-directed.   As the consumer use of the Internet grows and online transactions proliferate, insurers are able to capitalize on expanded access to sell insurance policies. This is especially true in developing insurance markets, where new products are created to meet the demands of the tech-savvy consumer.

 On the other hand, we have a very large population who do not have access to banking and insurance and forms part of the larger target group for government initiatives for financial inclusion.  Reaching out to this needy segment in the most cost effective manner is a challenge for the life insurance segment as the average sum assured for each life tend to be lower than national average.

Technology will help the life insurance companies to address the varied needs of the customer segments. “The basic purpose of insurance technologies is not only to help reduce cost but also to facilitate the availability of the life insurance products in easily accessible form” to the financial inclusive segments of the society. As the industry keeps evolving, newer distribution channels, which leverage on technology for designing appropriate products, reaching out to customers are inevitable. Currently customers find it cumbersome to sign up for a life insurance policy primarily due to large paper work and complex issuance process and technology can play a critical role in making it easier for the customer. Online availability of the insurance products either directly or through the distribution channels will allow the clients in easy pass through with application procedures,  signing  proposals and also in receiving  quotes  without even visiting the insurance office in person.

In some of the African countries, mobile companies are playing a key role in insurance distribution and servicing. Millions of people, who are subscribers to the telecom services, have access to protection through micro insurance. Insurance companies are able to leverage mobile phone technology to expand access to remote populations. Additionally, mobile phones can be used to facilitate premium payment and claims processing. We in India also, expect strong leverage of mobile technology and distribution capability in providing valuable life insurance cover to a larger section of the needy segment of the society

A customer centric approach is no longer a “nice to have” objective but is a “must have” driver of business proposition. Technology will enable delivery of quality advice by the intermediaries by helping them to understand the needs of the customer and recommend the most suitable insurance solutions.  Insurers need to have technology driven solutions to deliver value, which varies from the expectations of different segments of customers.

It is very important to provide ease of access to multiple service points to the customers. Most important requirement for a customer is to keep the policy in force by paying the renewal premiums on time and for achieving the same, the customer need to have ease of access to multiple renewal payment mechanisms including mobile technology.

Providing self help options and remote servicing capabilities with the enablement of technology is important in reducing the cost of transactions.  With the continued squeeze on profit margins, it is imperative for life insurers to find opportunity in every business transaction to reduce cost and maximise value to customers.  Adoption of technology in delivery of products, new customer acquisition, providing ease of service access to customers form an integral part of the business model. Moreover, technology will enable provision of life insurance to the larger needy segment.

Delivery of international benchmarked services which are relevant locally will play a major role in the development and growth of life insurance as in the future we need to reach out to customers and newer markets with product offerings & services that we may not currently offer today.