We hosted our bi-monthly initiative, Industry Night on 27th April 2018 in our office space. It was quite an insightful event for the attendees. Read on to know more about the happenings at Industry Night April Edition.
Our Program Director Niranjan Demanna kicked off the event with an introduction to the topics and the concept of industry night. He then proceeded to ask the audience how many of them had insurance, to which there was a sizeable response with a number of hands raised. Niranjan recalled the first time he bought insurance and cited the difference between buying an insurance and investing money in insurance. On one hand, the customers want to derive the most out of the insurance, whereas, on the other hand, the insurance providers, the corporates, want to understand the customer better. Niranjan cited from personal experience that he has still not settled down with a single insurance company and keeps shifting from one to the other. And mentioned that the purpose of this Industry Night was to get the startups from the insurance sector to interact with corporates where they can gain insights on how the corporates have been innovating, while at the same time showcase their newfound innovations and how these help customers navigate through the insurance process with ease, technology aside.
- Panel Discussion Topic
InsureTech – Evolution of the Insurance Industry
Puneet Sharma – Team Zone & BugClipper – Moderator
Anasuya Ghosh – Edelweiss Tokio Life Insurance
Ankur Sharma – Exide Life Insurance
Amrit Singh – Max Life Insurance Company Limited
Kunal Kalantri – ICICI Lombard – NOVA
Anasuya began with her understanding of InsureTech, that there is no clear definition as to what InsureTech is, like any other technology it is an evolving space. InsureTech comprises technologies such as AI, a whole new level of usage/user underwriting and ML, which provides predictability from past actions. The future of InsureTech could be different and lies in the hands of the innovators present.
Ankur then added that InsureTech also involves the media. Apart from AI, ML, and the latest addition Blockchain, it all comes down to how effectively these technologies can be used. You can also use ML to generate recommendations, for example, whether a customer buying a policy has the propensity to go for a claim or not.
In India, 98% of people go for savings and 2% go for a pure term kind of a policy. The goal here would be to make a more convincing promise to the consumer, regarding the cost structure of either distribution or operations coming down, as an incentive to invest. Peer to peer insurance, which may be happening in the west does not necessarily happen in India. Some instances on the lending side were introduced where the industry could facilitate peer to peer lending which eventually led to RBI issuing stringent regulations so that it wouldn’t get ‘dominating’. In Ankur’s opinion, these two factors are most important on the lending side.
The panelists then spoke about the most efficient technique. To which Amrit stated that new models are very far off, however, there is a lot happening on the distribution side. There is now a dominant aggregator who can be included in the InsureTech space, the ‘policy bazaar’ who continues to dominate the industry. These companies have come to be digitally born and target millennials who are prospective clients in the future. This is also referred to as life-stage based targeting. A bigger use-case is how to make operations and underwriting more efficient, with the host of technologies that exist.
Ankur on the technology aspect of the industry began with a question, “Whom am I selling to?” If the target group is millennials, they have a tremendous penetration in the usage of electronic devices such as smartphones, and before sales comes advertising, thereby making social media an ideal platform along with other forms of digital marketing. One use-case would be the use of RPA (Robotic Process Automation) tools, to automate the manual jobs done by the workforce in the back office. Second use-case would be with regard to underwriting, ML engine sources such as policy admin system, customer portal, etc. can use technology to profile customers to predict what would be the best policy to offer them. Technology also plays a role in the after-sales service.
Amrit spoke about how he sees a domain that he calls the nudge, if a startup is successful in generating a customer base with its technology, then a corporate-like Max Life would be ready to partner with them. The physical seller will remain in the picture due to the interpersonal relationship they develop with the customer. About 35% of the customers of Max Life do their homework before buying a policy. Any technology that enables his seller to become more smart and efficient is welcome, this could refer to analytics in the online-offline marketing, or the analytics put into the final CRM in the final management tele-banks operative. The third area would be the user experience, when the user buys the policy, the process should be paperless and person-less, Max Life is trying to opt for an operation-less model. He also cites the example of Prime Minister Modi and expects a paperless and physical-contact less future for the insurance industry.
“Rather than building a complex product, solving a business issue or the need of the company would be something an organization would be interested in.” – Ankur
Anasuya cited that there still exist some areas that could be worked on, specifically persistency. To gain renewals from a customer till the maturity period is something corporates seek, a lot of capital is spent on resolving this issue. A corporate that offers a solution for this can make a compelling pitch. Agent recruitment is another sector that needs innovation, training, licensing, etc.
Amrit – “Unlike a bank, the insurance company gets to see the customer only once. Thereby, any model or ecosystem that goes beyond insurance with respect to engagement is a need that corporates have.”
As far as existing models for startups to collaborate with corporates on, Anasuya said that there must be many but one she can talk about is not necessarily InsureTech. InsureTech somewhere takes help from the big data side of things, a lot of analytics is involved to predict customer behavior.
Another area this is used in is fraud analytics, while setting up a new branch, what kind of customers come through these branches. Depending on the credibility of an agent, where a bad or rather corrupt agent brings in fraudulent customers, use of data analytics to ensure that the Machine Learning platforms use the data to help pay the genuine claims and to catch the fraudulent claims at inception itself is relevant. Insurance is about paying claims, thereby this is a very important aspect that needs to be looked at. And these are the things that are being looked at, at Edelweiss Tokio.
The topic then shifted to specific events or channels that corporates may have every year to interact with customers. Firstly, corporates meet people, see how best they can collaborate, how best they can leverage the product the startup can offer. Secondly, since insurance has a big life cycle, we have to see how easy or difficult it is to get a product from outside and make that product work for the entire life cycle. The product the company has to offer should be able to synergize with the existing process of the company. Another thing that needs to be considered is the cost factor and the return on investment.
Amrit cited the example of the Digital Center of Excellence at max, which had a focus on energy. But in terms of a structured model to engage with startups, they’ve had starts and stops but there hasn’t been a definitive structure. There have been a couple of forums for startups to come and present to senior level management, to see what they’re doing and build on the use-case of appealing presentations.
Anasuya proceeded to say that, Edelweiss Tokio too doesn’t have a structured platform for startups to come and present their use-cases. However, Edelweiss Financial Services, the mother company of Edelweiss Tokio does. Edelweiss Financial Services does have a quarterly programme called the ‘What the Tech?’ where, specific solutions are shown to the senior management of all the companies branching out of Edelweiss Financial Services, which enables them to choose if any of these solutions benefit them in any aspect of their day-to-day operations. It could be in any one of the following: acquisitions, administrations, HR, operations, etc. Edelweiss also had a hackathon for the first time, a couple of quarters back. As a group and a growing firm, they welcome such innovators as no company has all the tools within the organization itself.
The panelists concluded with the question of when the physical agent will vanish. Ankur stated that it will take a while, probably 20 to 25 years.
“When one starts listening more to Alexa than his wife, that will be the day”.
Anasuya concludes, she doesn’t think there will be a complete digitization in India as far as insurance goes. However, she says she’s not sure and leaves some room for doubt.
What’s Industry Night?
Industry Night is an evening panel discussion conducted bi-monthly. We’ve leading corporates participating in B2B Meetings with startups, along with Demos and Networking sessions aimed to help growth stage startups to showcase their innovative products & acquire more customers. This will also be a great opportunity to understand the innovative nature of industries of tomorrow and their approach to winning the future.