Innovation Driving the Insurance Sector

A well-established and evolved insurance market is a boon for India’s boon for economic development. With the government focussing on Digital India for quite sometime now, several industries have experienced substantial changes and innovations. Needless to say, that the insurance sector is no exception to the rule. Of late, technology has substantially ‘disrupted’ the insurance sector leading several innovations.

Some of the major innovations that the insurance sector has been through in the recent past, include the following:

1. Insurance on personal assistant devices: Personal assistant devices or personal social apps have taken the fancy of many across age groups. Insurers have realised that these devices could act as a means to reach out to their desired audience in a very personalised and targeted manner. Many insurers have started using personal assistant devices like Google Homes and Amazon Echo. Taking advantage of this new technology, several insurance companies started to offer various services like inquiring about a policy, offering a policy, renewal of policies or all of them. Some insurers have also started to use platforms like WhatsApp to provide services to customers. Some have also developed app do deliver convenient insurance solutions to the customers. Future Generali India Insurance is among  the few players that has a dedicated app for their users (FG Insure App) and also uses WhatsApp services to provide insurance details to their clients.

2. Micro insurance: Insurance products that’s are usually offered to low-income class families are referred to as micro-insurance products. A more widely accepted definition is, where insurance companies offer a specific coverage for a particular need at a lower cost to the customers.

Unlike general insurance products, 'micro insurance' is usually affordable for  consumers because it puts in innovative limitations on 'time', 'coverage' or usage. Micro-insurance policies are based on very low premium rates. Most Indians can get the advantages of insurance because of its affordability and specificity. Going forward, micro-insurance is not only going to benefit the low-income strata but also the millennials.

Different types of micro insurance  include the following:

A) Time-based constraints: For e.g. if someone keeps their family van in their garage for 100 days in a year ideally, they should not buy own-damage car insurance for the entire year. A microinsurance policy that tracks the 'usage' of an asset is much more useful to the customers

B) Event – based coverage: For e.g., someone might be interested in buying a personal accident cover before she goes on a long weekend drive. An insurance can be purchased, which covers specific event risks at a lower premium. As soon as the event is done, the risk factor drops substantially and so does the apparent need

C) Need–based coverage: Purchasing an all-inclusive health insurance product may not be valuable for young customers but buying a vector-borne disease insurance or broken-bones insurance might be. Recognising specific need to a particular profile of customers, brings down the cost of policy

3. Cashless treatment and online health insurance: Considering the convenience of customers and the health service providers, insurers now provide the feature of cashless money transfer to the hospitals and clinics whenever an insured makes a claim request. Because of this, the treatment is not delayed due to the unavailability of physical cash. With various interactive and innovative applications and internet options, the customer can now save time and energy by keeping a track of their insurance policy, renew it and pay the premiums online from wherever they are.

To summarise there is huge potential to develop innovative insurance products that can leverage technology in every aspect.

The author is the Principal Officer & Key Managerial Personnel, Future Generali India Insurance