Insurance tech: analytics on mobile

The Indian life insurance industry is one of the fastest-growing financial services markets of the world. However, the market is still at a nascent stage. According to a report, life insurance products' penetration in India is around 4.5% while that of general insurance products is merely around 1%.

Changing Customers

Even as the Indian insurance market closes up on $100 bn mark, it is also becoming more layered and complex. Typically, the customer base can be classified into three segments: emerging market (18-30 years), prime market (30-45 years), and mature market (45-65 years), each with their own specific expectations. The rapid economic growth of the last decade or so has specifically empowered the Gen-Y customers (20-30 years), whose high incomes make them a strongly desirable target for insurance companies.

Gen-Y customers tend to do most of their insurance research online and through social media. Given that the challenge for insurers is to reach out to Gen-Y customers and effectively educate them on the various products available, helping them to make informed choices. This calls for shifts from the traditional agent network to newer channels such as web chat or social networks, especially because information and experiences shared over these offer an opportunity to assess real-time customer reactions and sell to them as soon as the opportunity arises.

The Agent Conundrum

Personal interaction has been the traditional way to sell insurance in India, but agents and intermediaries still get the lion's share of the insurance business. However, agents are often perceived as more product-centric and less sensitive to customer needs, with a focus on selling products that trigger commissions. Their incorrect sales techniques, over zealous approach, and product-centric behavior are a big turn-off for customers. This has led to the declining effectiveness of agents and intermediaries, albeit slowly.

Mobile BI-A Change in Approach

When a customer decides to buy insurance, he must be convinced to buy a product that suits his needs. Using effective channels to reach the customer is also essential. So how can the insurer ensure that agents are empowered enough to make a positive impact with the customer at every interaction, whether face-to-face or online?

 

The solution to this problem lies in mobile business intelligence. Mobile applications that offer the context-rich, real-time data on customer behavior, and preferences can increase the effectiveness of agents and intermediaries, enabling them to tailor their product pitches according to the customer insights revealed by analytics. It allows the agent to have the complete customer context at his fingertips before he/she calls on the customer. These BI apps can also be used to direct agents to target groups, such as Gen-Y, that offer more returns, with specific commission-related incentives.

For insurers to be effective, these mobile business intelligence tools require structured and unstructured information to be collected from a variety of disparate sources, collated, and analyzed. This can be done by harnessing the power of Big Data and Predictive Analytics.

Need for Alternative Sales Channels

Today, customers across all age groups are increasingly turning towards internet for all their networking needs. Moreover, not only are the traditional methods becoming ineffective, they are also notoriously expensive-agent-related commission now tops 40% for first-year premium and 7% for renewals. Hence, insurance companies must consider making low-cost channels, such as online and social media their major and primary distribution channel.

Also in the Indian context, insurance sales are highly influenced by family, friends and word-of-mouth. The rise of social media has ensured that a lot of this social interaction takes place online, over social networks. Therefore, having a social media strategy in place becomes critical for insurance sales.

Empowering Contact Centers

In an ideal scenario, given the wide reach of online channels, it would make sense to serve the customer online 24x7 through the complete life cycle-from sales to customer service and renewals, with round-the-clock transactions and timely payment of premiums. However, regulatory restrictions in India currently do not allow this, limiting the utility of online channels for insurers-at least for now. These limitations increase the potential for contact centers as an alternative to agents and intermediaries.

A contact center or help desk with contextual data available in real-time can serve customers with the same efficacy as an insurance agent. Further, different communication channels integrated into a common customer repository enable various customer support employees to have a historical view of a customer's interactions with the insurer. Additionally, help desk applications can offer accurate next-best actions to support agents, enabling them to respond immediately to specific customer requests. With high customer churn, analytics-based applications can be used to detect discontent with a provider early on, enabling customer support to take a more proactive retention approach and offer personalized services to each customer.

Seamless Claims Management

A major problem in the non-life insurance space is the endemic nature of fraud, waste, and revenue leakage. In accident-related claims, frauds are difficult to identify and/or locate because the validation mechanism to detect fraudulent claims depends on verification by a claims agent.

A way to mitigate this risk is to ensure that the insurer gets highly context-specific data regarding the claim, such as identifying the exact location immediately after the accident and capturing images related to damages to property or injuries to people. This will enable insurers to process the claim rapidly while also building an evidence repository.

A mobile-based digital assessor that guides an agent or a customer through the process of gathering claims-related data can speed up the claims process and insurer's response time to customers, improving customer satisfaction.

Looking Ahead

Agents and intermediaries still remain key to the sales and education processes in India, but are getting less effective. Insurers need to leverage technology solutions such as mobile business intelligence to make agents more effective. At the same time, online must be exploited as much as possible to engage customers. This multi-channel approach that leverages business intelligence and mobile technology offers insurers an effective way to succeed in a highly competitive and fast-changing Indian insurance market.