Insurance is a business of relationships; traditionally, an outcome of frequent handshakes between agents and their customers. That is changing fast. Some of the country’s biggest insurers are moving to a digital-first approach, reducing the dependence on agents for selling an insurance product.
Take the case of Edelweiss Tokio, one of the latest entrants to the insurance space. The company thinks of itself not as an insurance company but a technology company in the insurance business and that makes all the difference, according to its Chief Retail Officer Anup Seth.
Seth said that the company has adopted a completely digital policy even for its offline channels such as agents and company distributors.
“Digital has not only given the customer the power to access information as per his convenience. In addition, the use of digital and analytics tools like AI have helped improve the recommendations and enhance customer experience,” he said.
This also reduces the arbitrage of only those policies being sold which appear attractive to agents.
“Offline businesses are depended on the agents’ competency and how he sees the product in his mind. Digital has taken that arbitrage away by giving him the clear idea. Agents no longer end up selling what they want to sell,” said an insurance industry professional.
Edelweiss Tokio has a full stack of digital applications. For instance, an instant policy issuance which converts a customer’s money into a policy in 30 seconds. And, a unit-linked insurance plan invests the money in the market the same day the policy is purchased. The way companies are approaching digitisation is two-pronged. Not only are they intent on boosting their online sales, they are also focused on making their field executives digitally savvy via a range of tools, which use algorithms and machine learning to predict what a customer might want even before the latter expresses a desire.
“The list of prospects is run through an algorithm; it tells you which five of the 40 you put are more likely to buy insurance if they are told a certain story. We have started to run a predictive model. However, this can be done only when the agent has information like estimated income range, age, life stage, etc,” said Manik Nangia, chief digital officer at Max Life Insurance.
Max Life says its app is so built that no task takes more than 90 seconds at the agent’s level to get completed. The app also has ‘nudges’ – it shows agents the best performers in their city and their premium value, so that people are motivated to do more and compete while bringing in more business. This is perhaps why one in every five customers for Max Life comes through the digital medium.
Private life insurer SBI Life has to reach State Bank of India branches across the country and also service regional rural banks through its bancassurance partners. The company says 70 per cent of the bancassurance business is done online, through an application called ConnectLife. This is used as a digital proposal form and conducts everything from a need analysis to customer onboarding and digital payments.
The rise of digital
Rs 7.50 bn Life insurance cover sold online, of the Rs 12 billion in new business premiums each year
70% Bancassurance business of SBI Life originates online
65%: Policy applications of Edelweiss Tokio originate online
20%: Customers who come to Max Life through its website
Source: Insurance firms
“Once the customer agrees on a recommendation, the data goes into something called the customised benefits illustrator -- it tells the customer how the policy will look like in its entire tenure,” said Anand Pejawar, the company’s president for operations, IT and international business. “We also have an e-signature that can be attested on the benefits’ illustration. The application form then gets auto-filled, based on e-KYC, NSDL’s PAN verification and credit bureau data based on PAN information.”
When it comes to processing of claims, HDFC ERGO is emerging as a big user of artificial intelligence. The company is using machine learning as well to process hospitalisation claims faster. The average time taken for a claim to be processed and consumer discharge is now 17 minutes, says Mehmood Mansoori, head of its IT marketing & online business.
Similar innovation has been rolled out by the company in motor insurance claims. “No longer there is a need to send a surveyor to inspect your car. We send a link to the customer and the customer does the survey through his own phone and uploads it to us. Within an hour, we are able to accept or reject, for up to Rs 20,000,” he said.
“In the process of changing the character of the organisation, we would like to call ourselves a fintech company. Today, experience from an insurance house is expected the same way as from Amazon or Netflix,” added Mansoori.