How Insurtechs Can Change The Way Insurance is Bought

Companies should not just look at the digitizing the insurance segment but pay attention to the whole journey a customer is undertaking
How Insurtechs Can Change The Way Insurance is Bought
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Today, you can buy almost everything online — a smart phone, a ticket to your favourite holiday destination or even a car. But will you buy insurance? The idea will get very few takers, as the products are complicated and FAQs do not answer all your queries.

Digitization has already revolutionized multiple sectors across industries. Fintechs may take the pride for leading the revolution in the financial sector, but the insurance industry is ‘almost’ like an unexplored territory.

Mohit Rochlani, Director (Operations & and IT) of IndiaFirst Life Insurance shared his views with Entrepreneur India on how insurtechs can change the way the world looks at insurance.

The Change

The statement that “insurance industry is almost like an unexplored sector” holds true. The development here is at a very nascent stage though there are numerous policy aggregators in the market, he said.

Presently, the trend is people research online before meeting their agents or distributors where they can ask questions and buy a policy directly. However, with Chat Pods coming in, there will be a gradual change in the practice. People will not just look for policies online, but the entire processes of buying those will migrate to the digital medium, he predicted.

“It is not that people are not buying policies online, but the percentage is very low (single-digit figure), compared to the overall sale. It is small right now in comparison with a travel industry,” he said.

Explaining the situation, Rochlani clarified, “on most occasions, you buy it from your bank or distributor, because you repose your faith in them. In general insurance, this shift will be faster because the products are simple like motor insurance. In life insurance, where the product is more long-term, people still need more details and have questions to ask.”


Rochlani claimed that general insurance would be the first insurance segment to see the change, but at the same time reasoned that this is only because it is a short-term product and more or less standard in nature.

Noting that from a regulatory perspective, as of now, insurance companies cannot differentiate between rates, he said it is likely to change with personalized information of the buyer.

“Internet of Things (IoT) is used more in the general insurance segment,” he said and added, “If you have Fitbit or any related device, we can track the customer’s health and offer better rates.”

Turning to the healthcare he said medical infrastructure is quite weak and “we don’t know have much data about a person’s medical history.”  “Once this infrastructure improves, we’ll see more insurtechs getting into the health insurance segment as well,” he added.

In the life insurance segment, a disruption can happen if analytics can be used.  Insurtech companies can collect data of the customer through multiple channels and underwrite them i.e. evaluate their risks and exposures to offer rates better, he opined.


Instead of investing in the legacy system, Rochlani said insurtechs might probably work on CRM systems or a live admin system where the investments are less and flexibilities are more.

“Presently, we have no such companies. However in future, a lot of companies will have a digital presence and we’ll hopefully see general insurance companies in that medium. Here, insurtechs will play an important role, in terms of technology or services for customer engagement.”

Giving an example of chat pods, which are not restricted to the industry, he said, “Earlier when we buy these products, it was restricted to fixed features and any change in the platform would be an expensive affair. However, today, it is not the case; these products are more flexible and adaptive. One just needs a platform and keep building on it, depending on how the experiences are.”

Need of the Hour 

To start with companies should invest in becoming more digital. Thinking non-digital will not help as it will become very difficult for traditional companies to really adapt, he added.

“Customer experiences and expectations are changing fast. Insurance companies, which are thinking to continue the traditional manner, may become irrelevant,” he said.

Imagine the customer asking to see the products online or asking you e-KYC options and you don’t have one. The platforms should be as easy as to operate an e-commerce websites like Flipkart or Amazon.

“For a company like IndiaFirst, which is eight years old, it easy for me to change faster compared to an 18-year-old company, which has a lot of processes,” Rochlani claimed.

However, on the side, a large number of people are employed to handle transactions, who should be re-skilled to save them from being redundant.

“I think transactional jobs, be it sales or call center, are going to change in the next three-four years,” he said.

Pro Tip

Upcoming insurtechs should not just look at the digitizing the insurance segment, but also pay attention to the whole journey a customer is undertaking. “Start from the customer perspective rather than from the whole insurance and digital perspective,” Rochlani suggested.

If one starts looking from the customer perspective, one will know what the customer’s expectations are, he said and added this would not just help insurance companies but other industries. 

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