Revolutionizing the Insurance Sector with Generative AI

Insurtech: A Solution to enhance customer service and control cost

Insurance penetration has become a top priority for insurers today. It is calculated as the ratio of total insurance premiums to the gross domestic product (GDP) each year. Penetration indicates the level of development of the insurance sector. The Insurance Regulatory and Development Authority of India (IRDAI) has also mentioned that by 2047, every Indian citizen will have insurance coverage.

However, increased customer awareness resulting in an increased number of policies poses a great challenge for companies to issue policies in the traditional way. Additionally, the endless growth in the range of products on offer has further intensified the competitive nature of the market. With a tremendous increase in service expectations, customers are more likely to switch insurers based on service quality. As a result, adopting a technology-driven system has become essential.

This is where Insurtech companies play a crucial role, bridging the gap between traditional insurers and ever-changing market requirements.

Enhancing Efficiency and Reducing Operational Costs

With the help of technology, any insurer could make the insurance model more efficient and effective. Key benefits include:

• The increase in efficiency helps the insurance companies reduce their cost of operation.
• Secondly, by embracing solutions the technology provides, the process of customer onboarding becomes faster and simpler through a streamlined process.
• Technology enables from the quotation stage to the issuance of policies to claims service seamlessly with an audit trail.

Currently, many insurance companies are struggling with their outdated core systems. Moving to a new system is either difficult or delayed by internal resistance to change or due to the cost involved. Insurtech companies provide cost-effective solutions using AI and machine learning technology.

By using data analytics, insurers could get deeper into the customer requirement.

Improving Customer Engagement Through Digital Solutions

Insurtech companies offer smartphone applications and chatbots to respond to customer queries online. Insurance is an intangible product, and customers prioritize

• Quick and accurate policy issuance
• Fair and fast claims settlement

This becomes easier with the help of solutions provided by Insurtech companies. Insurtech companies help insurers explore new options beyond traditional human efforts.

They connect and bring all stakeholders outside the insurance industry, like healthcare providers and intermediaries, under a single platform by providing value-added services through insurers.

At the end of the day, every company expects a simple plug-and-play software solution that seamlessly integrates into their existing operations.

The Role of Insurtech in Addressing Legacy System Challenges

Approximately 150 Insurtech companies in India provide services through their applications, including

• KYC verification
• Quotation systems
• Payment processing
• Policy issuance
• Fraud detection and more.

They are not only cost-effective but also simple to adapt to. Though the solutions provided by Insurtech companies are independent of legacy systems, they also offer services to either integrate or transfer data with core systems. Unlike legacy systems, Insurtech solutions are flexible and easy to adopt, requiring minimal manpower training and intervention. Insurtech companies provide digital resilience even in adverse situations. They enable the insurers to manage a large volume of complex data.

Expanding Insurtech Beyond Retail Insurance

While most Insurtech companies offer solutions for pre-underwritten retail products, only a select few provide solutions for commercial insurance sectors like

• Fire
• Marine
• Engineering
• Group Health

In a competitive environment, pricing insurance products based on various data sets becomes easier with escalation and control mechanisms. Their role as business enablers cannot be overstated. By evaluating and engaging the right Insurtech provider, insurers can increase their business, enhance service levels for end customers, and improve their bottom line.

Conclusion

India has around 150 Insurtech companies, offering a range of services. The necessity to adapt to a technology-driven system has never been more crucial. Unlike legacy systems, Insurtech solutions need minimal manpower intervention and provide seamless digital integration. As insurers navigate the challenges of increasing penetration, adopting technology-driven solutions is no longer an option—it’s a necessity.