By Kamalji Sahay
The insurance industry has always been orthodox and even somewhat cryptic to customers. But insuretech has now completely changed the ecosystem around this industry. Today, any potential insurance buyer or existing policyholder can sit in their home, experience transparency with regard to prices as well as terms and conditions; and make an informed decision to better meet their needs.
Insurers have abandoned their classic understanding of the business of risk and seem to accept the customer as the focal point of their business. The new market environment has forced them to adopt the latest technologies and deploy capabilities for interfacing activities with customers. Even large insurers that struggled with a legacy IT structure opted for the gradual adoption of more agile software to avoid sudden redundancies. LIC is a classic example of such a wholesale transformation.
The wholesale shift from a middleman-led buying and selling process has placed the customer at the center of strategy formulation and product development. Therefore, today’s customers need to know what tools are available to them to make the best choice and make the most appropriate decision at a particular stage in their life.
However, this would require greater awareness on the part of the insurer public. It is in the interests of insurers that the initiatives they take to make themselves easily accessible to customers are publicized and that the old image of a very orthodox service provider be abandoned.
The potential buyer can easily collect information on similar products in the market via the internet and can assess the premium rates offered by different companies for similar coverage before preselecting a few of them. The buyer can even learn about the contents of the “fine print” of the bond or certificate of insurance by accessing sample bonds or the general conditions detailed in the brochure available on the website. They can then note the unique characteristics of comparable products offered by different insurers, and then make a final decision.
The technological surge in demand for insurance products clearly points to the prospect of faster growth in insurance business in our country over the next four to five years, but the new scenario will not necessarily mean more. of profits for insurance companies.
Competition among insurers will force most of them to rationalize premium rates and also seek a bigger reinsurance umbrella, especially after being hit hard by Covid 19 claims. Profit margin is likely to be negatively affected, even though well-run businesses will maintain their rate of income by rationalizing expenses by leveraging technology at the optimum level and maximizing investment income.
While technology remains the most powerful tool to transform the insurance industry in the current decade, potential clients will also need to play a catalytic role in order to get the best value from their product investment. insurance. Keeping in touch with insurers is essential. Engagement with certain products and brands can dramatically improve the quality of products and services.
The writer is the former Managing Director and CEO of Star Union Dai-ichi Life