How Digitization Has Changed the Retail Network And Bancassurance Channel Of Insurance Companies
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Ever since the onset of the COVID-19 pandemic, there has been an accelerated adoption of digital technologies in traditional processes with the intent of making human interactions both convenient and safer. This paradigm shift has been seen in most traditional businesses which relied on face-to-face interactions especially in the insurance industry driven largely by the increased customer awareness on insurance products. While most players in the insurance sector had already adopted digitization prior to the pandemic, the lockdown and subsequent restrictions imposed brought about a complete overhaul of both internal and customer facing processes at these companies. In order to expand their customer reach, Insurance companies have embedded digital technologies such as a dedicated API to enable their customers to continue availing of all services from the comfort of their homes.
Components of the digitization drive
This digitization push comprises of two parts; the first which that enables workforce to connect with people using technology aids such as tablets having customized mobile and Web applications, and the second part which involves the adoption of technologies such as artificial intelligence (AI), machine learning ( ML) and analytics in internal processes. Using these tablet devices, sales personnel can reach out to customers over the Internet and interact with them at their convenient time and location without the hassle of physically being available at a traditional outlet, as was the norm earlier. As a result, the sales team can now spend more quality time with prospective customers with the absolute safety of interacting from their respective physical environments. At the insurance company, the role of analytics has gained significant importance in identifying prospective customers and reaching out to them with tailored solutions within a fraction of the time required in the traditional process. Additionally, internal processes needing paper transactions have been replaced with electronic and digital means wherever possible so as to facilitate a faster and safer working environment for employees.
Transforming the bancassurance business model
Another area where there has been an accelerated pace of adoption of digital technologies since the pandemic is bancassurance; which is the relationship between a bank and an insurance company aimed at offering insurance products or insurance benefits to the bank's customers. By studying a bank’s customer base through advanced ML and analytics, the insurance company can offer these customers a faster data verification and fulfilment process through digital means. On every enquiry, customers merely must provide an identifier which is then used to transfer data from the bank’s ecosystem to the insurance provider to begin with the underwriting process, which is 100 per cent digitally driven. Post verification, the policy fulfilment and issuance can be completed on the same day even; thus offering a faster fulfilment lead-time to the end customer and the added convenience of receiving the policy copy through digital mediums like email and WhatsApp.
The digital future and its prospects
With increasing smartphone penetration in rural India owing to the increased affordability of these devices coupled with the changing regulatory environment that has enabled faster decision-making, there is going to be an exponential increase in the potential available for the insurance sector on the back of faster adoption and a limitless network presence via the Internet. It is only fair to conclude that the pandemic has only served to amplify the prominence and importance of digitalization in our lives now.