Tapan Singhel on Transforming Insurance in the Era of Digital Revolution

Digitisation brings efficiency in many ways, from cutting down paperwork to enabling video know-your-customer (KYC) updates and more. Insurers as well as customers have been talking about the convenience it has brought along. What has been your experience so far?

Those are the easier parts of digitisation—cutting down paperwork and reaching out faster to the customer via emails, among others. But let us look at the bigger picture. When the Covid-19 pandemic happened, nobody knew how to handle that, whether it was doctors or hospitals, because there were no protocols in place for it. But at that time, insurance companies would have data flowing in, which would show if something was going well and whether something was going wrong, as the data received would be on real-time basis. If that data could have been used by the government or by the World Health Organization (WHO), it would have enabled them to fast-track the learnings, which would have benefitted millions of people across the globe.

So, one, in an era of digitisation and data, in health especially, it can help you solve a lot of things at a hyper speed. That is exciting. Two, during Covid-19, everyone had their own island of digitisation—hospitals had their own, insurance industry did their own. Even today, when cashless treatment happens, hospitals get the data, then they send it to the insurance company, and they would look at it and process and so on. Why cannot it be all plug-and-play? Why cannot it be on a real-time basis? 

As an industry, we are putting up a platform on which all the hospitals and insurance companies will be plugged in so that processes and transitions are seamless. From the customers’ perspective, they will just walk in and walk out because everything gets paid on a real-time basis.

I think the real impact of digitisation will be felt in the next couple of years—it will lead to saving many lives, having better protocols, real-time claim settlement and more. The current impact is also good—it saves time, it is paperless, you have access, people can look at claims online and they can also file their claims online. But these are the easier parts of digitisation and it is a given. But the rest are the high-impact parts of digitisation which I see happening for the world and the industry.

During Covid-19, at some point, hospitals and insurers were not really seen to be on the same page. Can digitisation make a difference on that aspect?

I do not see it as not being on the same page. During Covid-19, across the globe in lot of places, claims did not get paid because Covid-19 was not covered under insurance. But in India, most Covid-related claims got paid. The industry did not hesitate to pay around Rs 30,000 crore in health claims. 

The issue comes in if people try to exploit, or benefit from, a crisis. That is wrong. Let us say someone goes to a hospital and beds are not available, and the treatment costs about Rs 10,000 or Rs 20,000, but you are asked to pay Rs 10 lakh for that. You cannot do that. That is where the exploitation starts happening. Similarly, if a patient does not require a steroid injection but still someone gives that because it gives more margin, it is harmful for the patient. But because of the huge database that the insurance industry has, because of the protocols that have been followed, and the access to the protocols recommend by the WHO and the government on the right way to do a treatment, it helps keep a balance if things are going wrong. This balance is very critical from the consumer’s perspective because, at that time, the consumer feels lost as it is a matter of life and death, and is ready to listen to anyone for solutions. And at that time, you need to be very cautious as, when there is fluctuation happening, the balance is very important too.

If you look at the claims paid at the time, the insurance industry did not go to the government for subsidies, and it paid the claims very gracefully.

Digitisation has opened the doors for customisation of products. Now there is intense competition in the insurance landscape with some new age companies coming in with novel products. Where is the industry headed in this scenario?

I would expect thousands of more companies to come in. In India, there are only about 60 companies compared to 6,000 in the US. There is competition among 60 but I would be delighted if 1,000 more companies were coming in. Competition is the fuel to excellence, so the more the merrier. Then, everybody needs to push to do something good for customers. Today 60 companies are doing it, and tomorrow if 6,000 companies start doing it, then the customers are going to get the best—the best of innovations, the best of solutions, the best of products. This is a welcome move. I remember in 2001 before private companies came in, the only distribution was through agencies. Today you look at the distribution, the number of products, the number of lives covered, it has been a phenomenal shift. 

What role do you think artificial intelligence (AI) will play in the future?

These things are already there. We were the first to come out with telematics, about seven to eight years ago. In India, technology is at the cutting edge. Quite a few things that we have done are the first in the world. AI-ML or machine learning has huge potential. I mentioned about the huge data that insurers generate. When you combine machine learning with that data, I promise you that millions of lives could be saved or would become better because of the data. That is how the insurance industry has to link with the health industry. It has to be a collaborative effort to make a huge difference.

The normal use case of machine learning as you see today is that if the claims come in, it will scan the documents, it will figure out the protocols, what has to be reimbursed, the genuineness of the claims and fraud analytics, are all happening right now, which every good company would be utilising.   These are, in my view, the efficiency of processes but high impact will be made once data is used in figuring out illnesses ahead of time, what is working or not working, and how you would solve issues.

For instance, in cars today, telematics will tell you if there is a potential problem with the engine or if the tyre pressure is going down. As a person, you would want to know these things in advance so that you can do something about it. With all this happening, the world is getting into very exciting times. At the same time, all this has to be used well, with single-minded focus and obsession to make the human lives better. 

Claim settlement has always been a pain point. Do you think that digitisation can make processes more efficient?

There is a perception that claims are a pain point. So, I ask a lot of people whether they had a claim and what their experience was like. One who has a bad experience would mention it and I would check deeper and explain why the experience was like that. You will be surprised to know, according to publicly available regulatory data, the insurance industry has the least grievances to the number of customers in the financial sector. Yet, the perception is there.

So, for example, if your health policy is new and there is a claim for diseases such as heart ailment or cancer, the industry starts thinking that this policy may have been taken after you became aware 
about the disease. Which is not the way a policy works. Then everybody who falls ill will go and buy a policy, the policy will pay you, and that way the industry will close down tomorrow.

It only works when you buy a policy when you have no illnesses, and when it develops and it pays. If you have a policy that is more than five or six years old, from any company, I will be surprised if there is a problem with claims. I am sure that it will be a smooth process in most cases. As data shows, over 96% to 97% of claims get paid smoothly, with no issues. But if you have a new policy and if you have a claim, then the industry will start verifying whether it is a genuine customer, or it is fraudulent, or if someone has taken a policy after developing the disease and that is where the conflict starts coming in. 

Digitisation will not change that but will make the process simpler. That is why I always recommend people to take a policy when things are going good; like make friends when things are going well in life. Taking a policy when things go wrong will perhaps be too late.

We have seen a lot of changes in urban areas, especially after Covid-19. But what about Tier II and Tier III cities? Insurance penetration still may be an issue there.

One important thing that we should look at is that insurance and the government have now started working together. The health policy for all introduced by the government provides health insurance across spectrums, reaching cities and towns to everyone there. Something like that also helps build infrastructure. It is a Rs 5 lakh basic cover and a huge section of the population gets covered there. Because of the good sum insured offered, you have good hospitals looking at opening their chains in Tier II and Tier III cities, which leads to a flow of money. So, it is always a positive cycle. As insurance penetration increases, more hospitals will have a good flow of business, there will be more doctors coming in and which will help increase the lifespan of the country as a whole. Tier II and tier III regions are already reaching that level as penetration is increasing. Additionally, the regulator is already working with the industry on Bima Vahak and Bima Vistaar, which will be at the panchayat level. 

While digitisation has brought along many benefits, sometimes seniors may be unable to make full use of it because they may not be so savvy. How is the industry planning to deal with that challenge?

That is again a myth. In my family, my father and my younger daughter are the most tech-savvy. When it comes to ecommerce or social media, I see seniors handling it very well. These are simple procedures. I do not think we should be undermining anyone.

Having said that, the industry is also looking at providing a lot of support to seniors. We have an insurance product in which we have a watch with an SOS button. So, you just have to press it, and we call you. If the call does not get picked up, we send an ambulance over, pick you up and get you treated. It cannot be simpler than the press of a button. So, we have a product of that nature also. So, as I said, we always keep looking at where the gaps are and try to plug them.