Digital 3.0: Accelerating Insurance evolution in India

The mantra Predict - Personalise – Engage epitomize the Digital 3.0 revoultion as operations and distributions go digital this decade. Insurers are coming to terms with the transformative power of predictive algorithms and big data.

The Insurance 1.0 era, from 1956 up till the 2000s were the years of public sector monopolies that were and largely remain paper-centric. The data collected through conservative means, and through public records in specific demographics and local geographies remained generic at best.

The years' post-2000 era, spurred by the initiatives of the IRDA, saw high growth and competition as private players were allowed entry.

This transformed the insurance industry into a buyer’s market as Digital Insurance 2.0 took hold just 15 years back. Instead of a one-size-fits-all approach, insurersrolled out customized insurance products through the digital insurance process.

Policy aggregator platforms, insurance-specific technologies for risk assessment, claims, and customer care positively disrupted the legacy business practices of the monopoly years of the Indian insurance industry.

In numbers, this technology disruption was worth US$ 280 billion, which was the digital side’s contribution to the industry turnover by the end of 2020.

The three macro market forces that are driving the sector's evolution to Digital Insurance 3.0, are People, Market Boundaries, and Technology. A digital-first demographic, freeing up of regulations allowing both private insurers and InsurTech and FinTech companies to enter the market, and increasing internet penetration hasled to customers experiencing and expecting ever-evolving digital experiences, products, and services that make the best of new technologies.

Insurers like HDFC have started IoT-based services in 3.0 ecosystems that integrate mobile applications with wearable devices. Transformations like these are making the entire insurance buying experience in India completely dynamic with highly tailored and personalized services.

Proactive Insurers are looking at cross-industry partnerships in mobility, smart housing, and connected health that harness Big Data and IoT technologies to provide new services and products to delight customers.

Firms are deploying Big Data to optimize marketing campaigns, automate several manual processes, and enhance customer touchpoints. Insurers should reach out to potential ecosystem partners early and proactively engage with them to develop and fine-tune an adequate offering.

Acko Insurance is one such example of  3.0 insurance company. It is a fully-digital insurance provider that through paperless transactions has made the whole insurance experience digital and hassle-free.

The emerging Digital leaders of the insurance sector are leveraging IoT and Big Datato better understand, serve, and connect with customers. The Insurance industry in India is poised for a transformation that will be catalytic in bridging the insurance gap in India.

Technology-friendly insurance services will be the ones that will service the uninsured and reach people in the remotest corners of the country powered by the data revolution. Going digital is not a question of when but how soon can insurers be ready to deal with the future generation that is a digital-first and eventually a digital-only customer.

As boundaries between industries blur, investment in these technologies are a long-term bet for Insurers. The frontier beyond core products, like financial planning and health monitoring, is synergistic partnerships with the technology partners to expand their market position and extend the ecosystem of interconnected products and services.

The author is Pradeep Satya, CEO and Founder, Synergy Strategic Solutions