Changing Phase of General Insurance and Influence of Digitization
Mayur Vasa: General Insurance in India is increasingly being challenged for its Business Models most significantly by advances made in Technology. A digital ecosystem is steadily paving its way into the thick of things. The day is not far away, when the integrated network of organization, individual contributors, institutions and consumers would interact to create combined services and mutual value. I strongly believe those growing consumer expectations for tailored and sophisticated products and the rapid adoption of technology. Internet of Things (IoT) although currently having a low market penetration has the potential to create transformational impact on the insurance value chain. Entry of non-traditional firms in the form of Personal Health Apps (mHealth) is another high-impact trend for both insurers and customers. Adoption of such technology trends will mean a different variety of data, and for which the insurers need to be prepared to drive actionable analytics on it. With the decline in the cost of sensors and significantly improved communication methods, Connected Cars and Connected Homes are expected to have widespread adoption in future. Superior data processing capabilities will also help insurers trying to experiment with Point of Sale Analytics thus aiding their Customer Centricity objectives.
Question: Intelligent interfaces such as wearable computing, home sensors, and vehicle telematics are blurring the physical as well as digital world. With industry experts hoping intelligent edge devices to bring massive disruption to the insurance industry, how do you think will Digital-physical blur transform the industry?
Mayur Vasa: Insurers are forced to rethink their technology strategies due to the Digital explosion. Wearable although catching up very slowly is surely poised for long-term growth. Insurers would also realize that wearables provide a much more accurate picture of Individual health risks than the traditional methods. Vehicle Telematics will transform Insurance Services to become Insurer-Initiated rather than Customer-Initiated. In the Sales and Underwriting areas, the Digital-Physical Blur would force Insurers to rethink their Product Designs and would push them to designing advanced pre-underwritten products that can be offered through various Digital Channels with zero human intervention. Insurance Industry will have to specifically look at converting various processes in the areas of pre-sales, purchase and payments, customer grievance handling and feedback, renewals, claims to become Digital-First with other functions/departments to follow-suit very soon.
Question: Most established companies in the insurance industry have been slow to adopt digital, tools and business models, relative to other industries, such as retail, media, travel and retail banking. What is holding back the insurance companies?
Mayur Vasa: Unlike other Retail Industries like Media, Travel and Retail Banking; General Insurance continues to remain challenged when it comes to continuous customer engagement through the duration of the Insurance Policy Coverage. Majority of the insurers would admit to them not being Digital Leaders and would also agree that they trail behind when it comes to customer engagement and effective adoption of mobile social media. There could be many reasons for Insurers taking a cautious approach and some of them could be around market instability to catastrophic losses from natural phenomenon to ever changing needs of the end-customers.
Question: Most insurance executives realize they have to step up their digital investments. Yet many remain unclear about exactly where to start and how to proceed in organizing for digital innovation and redesigning their processes. Can you suggest some guidelines for the same?
Mayur Vasa: Most Insurance executives realize that Digital is not (just!) IT and vice-versa. Moreover, Insurers also realize that customers will increasingly dictate the terms of engagement with their insurers, which in itself is a fundamental change in the industry. Hence, executives and industry leaders also need non-traditional approaches like setting up cross-functional think tanks that are outward looking and are constantly abreast with the dynamics of Digital World. Increasingly industry leaders are also realizing that it's not just the big IT players but those small niche start-ups that may have the potential keys to their digital transformation journey.
Question: How does Liberty Videocon General Insurance see the digital transformation of the insurance industry?
Mayur Vasa: With the traditional cloud related insecurities out of the way, transformation would be in areas of user experience of Intermediaries and customers and in the areas of distribution enablement.