Topics In Demand
Notification
New

No notification found.

Role of InsurTech to enhance inclusion in the insurance market in Digital India
Role of InsurTech to enhance inclusion in the insurance market in Digital India

August 12, 2024

129

0

The Union Budget strongly touched upon the fact that the financial sector does play a key role in supporting economic growth and one could not agree any more. Financial inclusion, one of the key enablers of socioeconomic growth, has largely been a fintech success story up to this point but is poised to be bolstered, in the coming years, by the rise of InsurTech. In order to achieve the ambitious vision of USD 7 trillion, the role of Fintech solutions will surely be of utmost importance in the coming years. With India taking rapid treads in digital adoption, financial inclusion has been accelerated over the past decade by the success of fintech and insurtech companies. The platforms they developed have enabled BFSI and e-commerce companies, government schemes, food delivery services, and others, to take their offerings to a much larger, pan-India audience than before.

Today, digital technologies continue to further improve the reach and convenience of various financial and insurance services. UPI has been a world-leading innovation that has been adopted by consumers at mass scale. e-KYC, meanwhile, has reduced the time and cost for banks to on-board new customers. Role of generative AI has improved insurtech’s risk assessments and tedious documentation across cohorts. Similarly, the emerging role of embedded insurance or sachet size products distribution has ensured positive insurance penetration among masses and created insurance awareness too in the urban and rural parts of the country.

India is slated to become the sixth largest insurance market by 2032, with total insurance premiums growing on average by 9% annually over the next decade. A recent Capgemini report too reflected on various trends from 2023 to 2024 in the life insurance sector, which is continuing its focus on data, prioritizing underwriting accuracy, embracing value-added services, and bettering customer experiences with the use of technology. There has been significant growth and progress but there’s still quite some distance to go. Delivering great customer experiences and using data and analytics will be two very important actions that will shape the evolution and growth of the InsurTech industry in the foreseeable future.

Lets see how.

Leveraging technologies to deliver great customer experiences

The important thing, and which most InsurTech firms are already doing, is to put customer-centricity at the very heart of their operations and employ technology in various ways to this end. Today, it is possible to use Generative Artificial Intelligence, Machine Learning, and Big Data to gain deep, databased understanding of customer behaviour and customise products and services for different customer profiles. This is important because customers expect personalised insurance products that suit their lifestyle and financial goals. Analysing data at a customer or group level makes it possible to create an accurate risk profile for each customer and determine a fair premium and coverage for every individual or group, including the ‘new to insurance’ segment. The more affordable and relevant that offerings are, the more will be the level of inclusion into the insurance fold.

Inclusion is further enhanced by the fact that InsurTech simplifies or eliminates many of the conventional steps involved in availing of an insurance cover. Today, there are online tools that allow consumers to browse and compare the insurance offerings of multiple providers and select the one that best suits their requirement. AI-powered systems can assess damage, verify policy coverage, and process claims speedily – a great advantage for consumers. From the point of view of insurers, AI-and-ML-powered systems make it possible to predict future events, measure their risk, and determine claims with higher predictive accuracy.

Overcoming barriers to inclusion

Yet another important hallmark of financial (and insurance) inclusion is that these services should reach even traditionally underserved populations, whether rural or urban. This calls for collaborative efforts by the government, regulators, insurance companies, and InsurTech firms to enhance financial literacy and develop insurance products and services that are accessible, affordable, and relevant to all. The vast size of the country and a traditionally laidback attitude towards financial planning present significant roadblocks to selling insurance in India. Moreover, life insurance companies have limited physical presence across the country, in comparison to other retail establishments, such as banks or the providers of other consumer-facing products and services. Long-standing social inequalities in some parts of the countries add to the problem. However, digital insurance, leveraging the now-ubiquitous medium of mobile devices, helps in overcoming such barriers to inclusion. With the advent of pocket size or call it embedded insurance products, insurtech is able to support the insurance sector in creating insurance penetration in India making it possible to reach the ultimate goal of Insurance for all by 2047.

The Next Frontline

With the insurance regulator IRDAI coming up with various new initiatives to open up the industry, insuretech is paving the way for futuristic innovations which can potentially shape India’s insurance segment in the next 10 years. Deloitte report cited that global economy is expected to witness a synchronous rebound in 2025 as major election uncertainties are out of the way and central banks in the West likely announce a couple of rate cuts later in 2024. India will likely see improved capital flows boosting private investment and in the Fintech space. InsurTech will provide a positive impetus in welcoming a new era of financial inclusion, where everyone will have access to at least the basic, essential financial products and services. There is growing awareness about financial security; rising demand for insurance products; government schemes for the masses; and regulations that encourage the entry of new players into the sector. The building blocks are all in place for an inclusive and prosperous Digital India.

 

The digitally savvy generation across the length and breadth of the country will witness an increase in the positive impact on the economy. Insurtech is set to change the insurance landscape. It offers a trifecta of benefits: customized coverage options that cater to individual needs, user-friendly digital platforms for comparison shopping, and streamlined claim submission solutions that expedite payouts. The role of the insurtechs will be to streamline the industry and enable growth in the coming times. 


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


Download Attachment

Zopper - Role of InsurTech to enhance inclusion in the insurance market in Digital India.pdf

images
Mayank Gupta
Co-Founder and COO

An experienced leader, currently serving as the Co-founder & Chief Operating Officer of Zopper. I have successfully led multiple startups, including EduKart, showcasing my skilled and strong entrepreneurial acumen. My extensive background includes notable roles in multinational organizations like Coursera, IBM Business Consulting, Bank of America, Merrill Lynch, and L&T Finance

© Copyright nasscom. All Rights Reserved.