#Six Trends that Will Disrupt the Insurance Industry for Good
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Last year, there was too much news buzzing around the insurance industry as multiple public-sector undertakings (PSUs) and private companies, such as HDFC Standard Life Insurance, New India Assurance, ICICI Lombard General Insurance along SBI Life and General Insurance Corporation issued Initial Public Offerings (IPOs) to list themselves at the stock market. The move clearly indicated that the industry means serious business.
The insurance industry, which is presently pegged at USD 60billion, is expected to grow four folds in the next 10 year period. With technology-driven innovation kicking in, sooner or later, this growth will be driven by a major industry disruption and the customer will be the final winner in this game. In a recent report, Deloitte listed five exponential trends that will drive this disruption in the industry:
Chatbots have been around the block for quite some time and all of us have been witness to its ups and downs. But soon with advances in cognitive technologies, Deloitte says, it will be possible to provide increasingly accurate and relevant automated dialogues.
Take the example of speech recognition software, which has made noted developments in reducing word error rates. Similarly, deep learning techniques have helped in machine translation.
“Improvements in speech and language processing technologies are making chatbots more capable, expanding their potential applications across the enterprise,” the report added.
Wearable technology is the new trend in the market and all thanks to the Internet of Things (IoT). In fact, as per IDC Asia, India's wearable market was up by 42% in the second quarter of 2016 — over 567,000 units of wearables were sold.
During a previous interaction with Entrepreneur India, Mohit Rochlani, Director (Operations & and IT) of IndiaFirst Life Insurance said IoT can be used more in the general insurance segment wherein Fitbit or any related device can be used to track the customer’s health and offer better rates.
Similarly, the report shares an example of Bajaj Allianz. The company recently launched DriveSmart device, which allows customers use pay-as-you-drive motor insurance policy and the product supported by telematics technology.
The gap between covering everything every time and precisely the risks faced at a certain moment called for a new product called on-demand insurance, the report shares. The product is driven either by need or an event.
One of the first players in the Indian on-demand insurance space is Fingoole. This insurtech provides travel-related covers such as missed flight, delay of checked-in luggage, bounced hotel booking, credit/debit card and personal accident during the trip.
Sharing economy as a concept has disrupted various sectors like transportation (carpool services) and B2B real-estate through co-working spaces. The concept is now all set to create a stir in the insurance industry and the new model is globally known as P2P insurance.
The report notes that the new insurance companies in the fast-growing P2P segment are using crowdsourcing and social networking to create a shared insurance experience, but one needs to wait and watch whether P2P insurance will work for the Indian market.
Internationally, some of the startups working in this space are Germany-based Friendsurance, France-based InsPeer, London, UK-based Guevara and New-York based Lemonade.
Chances are that you must read enough about blockchain and its potential uses. For those of you who are new to technology, blockchain is digital distributed ledger that can help companies detect frauds, save time and manpower, maintain e-records, etc.
Smart contracts powered by a Blockchain could provide customers and insurers with means to manage claims in a transparent, responsive and irrefutable manner, the report added. However, for blockchain to work, the community needs to partner and work together on a platform.
According to a Business Standard report, thirteen Indian insurance companies, which include HDFC Life, India First, IDBI Federal Life Insurance are creating a central repository of policyholder data, so that insurers need not repeat the registration procedure for multiple policies.
Robotic Process Automation
Traditional cost reduction mediums are not enough in today world and that’s when computer-coded, rule based software that are known to automate manual activities rule-based tasks come to the companies rescue
One of the common use case has been around accounting close, which is a rules-based process, conducted across multiple locations often requiring multiple handoffs, Deloitte pointed out.