Insurtech Ecosystems

We live in a digital first world, and there’s very little here that advanced tech has not been able to disrupt. The insurance industry is no stranger to these disruptive innovations, and traditional Insurance is fast moving to transform into InsurTech. With customer satisfaction, transparency and cost efficiency at its core, it is becoming massively popular within consumers all across the globe. The pace of this evolution is also accelerating, thanks to disruptions like electronic data, improved mobile interfaces, and deep learning backed artificial intelligence systems.

In the Indian context, we have moved way beyond the LIC model. Many private providers have come to prominence in the last decade, and more than 11 startups have raised $337 million in the last year. An IndiaInsure report also predicts the Indian insurance industry to hit Rs. 682 Cr in 2019. Ever since 2014, after the Insurance Act, the industry has shown remarkable progress and confidence. We’re still a little behind our global counterparts, China and Israel in terms of innovation, the numbers speak for themselves. Imagine the potential we’re yet to unlock!

The complete package: InsurTech Ecosystems

We’ve already established that traditional has become redundant, and it really is time for us to move on to new age. Looking at this from an insurance perspective, ‘InsurTech ecosystems’ have been named as one of the biggest trends of the year. In very simple terms, this means pushing the boundaries of the value chain in use so far. The business model needs to evolve in a manner that expands customer offerings to solve their immediate needs, with CRM as the backend focus, even if it means going above and beyond the standard offerings.

For example, healthcare costs are constantly on the rise, and claims payments are not the only problem they face. Plugging in high end medical advisory services would be the right step towards building a healthcare ecosystem! They need to look at similar offerings for finance, banking, agriculture etc. The goal of insurtech providers should be to act as enablers of innovation for the overall value chain, only then can disruptions sustain.

Elements of a complete InsurTech ecosystem

Everything said above is easier said than done. It’s a tricky path to tread, and insurance providers need to take baby steps to build successful InsurTech ecosystems while breaking free of pre-created patterns. The digital native consumer, especially the millenials thrive on two things: customization and intuition. Which means that these ecosystems need to be user centric, not focused on the product. And how do you reform this seemingly small (but actually humongous) approach? There’s only one answer: technology. Considering that the Indian IT sector is one of the best in the world, this is exciting for us! We already have more than 429 million active internet users.

Revolutionary tech like artificial intelligence, IoT and blockchain have a huge part to play here. InsurTech ecosystems today must have a sophisticated, integrated architecture that promotes cross-functional collaboration and omnichannel customer experiences. Mobile apps with self underwriting capabilities, RPA that automates servicing, predictive analytics based fraud management models and API integrated digital exchanges have already left their mark behind, and there’s so much more to come.

Bridging the gap: Next steps for digital insurers

You can have the best technologies at your disposal, but as long as the people handling that tech are not well equipped, there’s very little you will manage to achieve. Insurance, or any other industry, it’s important to remember that people always come first. The thought process of today’s insurer, thus needs to focus on protection, prevention and assistance.The downside of having intelligent tech integrated with In the age of hyperconnectivity and dynamic businesses, customers have multiple touchpoints to interact with. Products, thus, need to be simplified, and customer awareness needs to be driven aggressively. Insurers will also have to play the role of web aggregators going ahead, since insurance is increasingly becoming commoditised. An ecosystem driven approach provides for a more holistic customer experience, especially when Fintechs are brought into the mix. Digital insurers also need to plan their strategies in line with key customer challenges, to avoid competition that can sweep customers away. A key focus on post sales service makes a tonne of difference!

To wrap this up, an insurance ecosystem is incomplete without digital enablement and personalisation. Customer acquisition, is of course, top priority, but embracing tech as an enabler will keep the existing consumer base happy, which is more beneficial in the long run. No part of this is easy, but where’s the fun in innovation without a good challenge! All we have to do, is take it one step at a time.