How automation is bringing advantage to core insurance functions? – Times of India

The insurance segment, over the years majorly depended on the traditional branch-led manual model. Physical interactions, visiting an insurance office for end-to-end insurance process, multiple documentations, signing hard copies formed the very base of insurance. In the last few years, there been a massive transformation in the insurance sector, with digital coming into play and now taking the lead over the tedious manual process. To add to this, Covid-19 pandemic acted as a catalyst, in building awareness about the importance of insurance and highlighted the humongous benefits of contactless, faceless, digital insurance, which made the entire process seamless and quick.

In the last two years (especially after Covid), there has been a radical shift towards InsurTech, wherein consumers both in the urban cities as well as from the semi-urban and even rural pockets of the country benefited enormously from the tech driven insurance models.

Consequently, the entire insurance eco-system, starting from insurers, distributors, aggregators and consumers were pushed to leverage digital technologies for an improved insurance experience. Technology has been helping insurance reach to the masses, fasten the process, with policy issuance in minutes. Over the time, many technology developers came up with new and innovative products to make underwriting, risk assessment, claim settlements seamless for consumers. Below are some ways how automation has been making a difference in core insurance functionalities:

AI helped in scaling up of business- AI is no more Just a term in insurance. In the last few years, many tech development companies have scaled up their capabilities in providing tech support to the insurance value chain. AI has become more real-time, driven by algorithms. It has helped in the use of historical data, underwriting risks, claims, geospatial data, and has been providing insights for creating risk-based products within minutes. AI has been instrumental in assessing risk profiles of consumers more accurately, which in turn helped insurance companies issue policies as per the consumers credit score and finance portfolios, in lesser time. AI is disrupting the insurance distribution space and it will change the face of digital insurance in the times to come.

Claim settlements are becoming faster and seamless- As insurance companies jostle to increase their consumer outreach, one of the key determinants for consumers making up their minds is the claim- settlement ratio. Settling claims have never been easy, as insurance companies have to process thousands of claim requests on a daily basis, depending on their consumer base. Manual process, not only made claim settlements slow but increased the operational costs of insurance companies. Automation has helped in streamlining claim settlement processes, in many cases, it has helped in reducing claim settlement turnaround time by 70%. Starting from data capture to settlement initiation, approval of claims, tracking of payment and recovery, and processing of legal issues to managing communication, AI and other tech tools have drastically reduced the turnaround time.

Personalization of insurance products for consumers- Who ever thought, the concept of micro-targeting could be applied in insurance too. But InsurTech developers, with the help of data analytics have gathered large amounts of information from the digital footprints of consumers, financial portfolio, spending behaviour and accordingly helped insurance companies reach out to consumers with the right kind of insurance. Companies are also now looking at creating personalized insurance products for consumers, which are in sync with their needs and preferences, this will drive the next big growth in the insurance industry. With cyber security tools, companies ensure that the data gathered is safeguarded for consumers. Not just that, InsurTech developers are constantly working towards making the entire user experience seamless.

Connecting insurance agents and consumers through Hyperlocalization: Could you imagine the insurance sector working like food delivery aggregators or like Google Near Me, where consumers can connect with insurance agents within minutes, in the same vicinity. InsurTech developers made way to Hyperlocalization with the use of AI/ ML, where consumers could choose insurance agent within the same locality, over an app and connect with agents within minutes. While the model is still at its nascent stage in India, Hyperlocalization will bring in a dynamic shift in the way agents and consumers connect with each other.

Views expressed above are the author's own.

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How automation is bringing advantage to core insurance functions? - Times of India