We live in a digital environment where everything is connected to technology in some way. From taking a ride to ordering food and groceries, everything happens digitally. With growing internet penetration and rapidly increasing incomes, there has been tremendous growth in digital businesses. Many sectors are digitally transforming themselves to stay relevant, and the insurance industry is no exception.
New-age insurance companies that have cropped up recently have understood the needs of the current generation whose preferences are shaped by both digital and physical realities. Millennials, who account for more than 34 per cent of the current workforce in India, drive the way insurance works. Insurance companies are introducing innovative products that are enabled by technology, which directly address the need for a simpler and faster insurance solution to cater to this generation of consumers.
Here are some of the features millennials often look for in an insurance product:
Typically, insurance terminologies are difficult to comprehend. New-age insurance companies are simplifying the terms and norms addressing this to make the process seamless. Also, it is made mostly digital and without paperwork to facilitate tech-savvy consumers, who dislike paperwork and elaborate processes.
Bite-sized insurance products have a low premium, yet address the needs of the consumers. For instance, mobile insurance, cycle insurance, seasonal diseases and specific insurance (dengue) are products that are specific to the need and can be availed of at a low premium.
Lifestyle is one factor that reflects on the kind of new products in the market. For example, gymnasium injury insurance is something new in the market, which is designed considering the need for medical security attached to fitness.
Traditionally, the insurance market was restricted to products like life, health and motor and the demand for these products was very investment based. However, with the introduction of bite-sized insurance products, the industry has changed drastically, and the products now focus on the need of customers and cover assets that have increased in emotional value like mobile insurance, travel insurance, pet insurance. these products are need based and connected with the customers depending on their emotional link with the cover and security that the product offers.
Technology has been used by the insurance sector to simplify operations across distribution, buying and claim processes. Application programming interface (API) integrations, artificial intelligence (AI) and machine learning are some new-age technologies used by digital insurance players to provide seamless service to customers.
The following three ways describe how technology is simplifying insurance:
Pre-inspection process: Pre-inspection processes done through an app-based system helps in faster turnaround time for claims.
For example, earlier, in motor insurance cases, policyholders had to contact the agents or go through a lot of paperwork to settle their claims. However now, policyholders can apply for a claim by clicking real-time pictures of the damages on the car and start the process. The AI- enabled Process recognises basic checks like registration number and colour of the vehicle. It speeds up the process of inspection and also of policy issuance.
Automation of claims process: The claims processes for some products are seamless, and the customer does not have to worry about anything. For instance, in travel insurance, the claims process involves reimbursement of money in case of flight delays or cancellation.
Now, with the help of AI and machine learning tools, flight delays and cancellations are tracked, and a link can be sent asking for boarding pass details and bank details. The claim amount will be credited directly to the bank or wallet cash according to the customer’s preferences.
Traditionally, paper-based documentation was considered as proof, and all transactions were recorded on paper. Considering that the young population is tech-savvy and wants solutions at their fingertips, new-age insurance companies are going 100 per cent on the cloud. From getting a policy till claiming, all the transactions are carried out online. For example, details about the customer and the vehicle can be sourced with the help of the vehicle’s registration number during the time of the claims process. There is no need for filling in the details of the customer again as all the information, including the vehicle colour, engine number etc. is saved in the system. Also, incase of vehicle documents, customers do not have to share any hard copies and can just share a picture.
The insurance sector is welcoming change enabled by innovative thinking and technology. Hence, it will continue to see disruptions in the sector. It won’t just come from the new companies but also the traditional players. Wherever the inspiration comes from, the end-customer will be benefitted, and that is what a simpler world of insurance would mean for the millennial generation.
The author is the Head of Marketing and Sales (Digital) at Digit Insurance