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How to Effectively Use Technology to Democratize Insurance

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Dhruv Sarin, Co-Founder & Chief Business Officer, PBPartners

The insurance sector is undergoing a technological transformation that will help democratize insurance among the masses, ushering in a new era of effectiveness and customer-focused services. On the governance side, regulatory technology for insurance fair practices and using Data Analytics in insurance value chain optimization will also play crucial roles.

With a deep-rooted background in the insurance industry, Dhruv Sarin, Co-Founder & Chief Business Officer, PBPartners sheds light on how technology is revolutionizing the sector. Having traveled with Policybazaar.com for 13-plus years, wearing multiple hats, he has been the Chief Business Officer for PBPartners.com, launched in June 2001, for the last three years. Below are his insights on the new era that technology has brought to the insurance industry.


How has technology changed the customer buying experience of insurance products?
Technology has simplified the accessibility of plans. To give you a perspective, motor insurance’s basic starting point was on a piece of paper called cover notes back then. The entire process had a few gaps here and there, leaving a bad taste in the consumer experience. I think digitization of the proposal forms, among others, helped largely in enabling a seamless underwriting process. On-the-go underwriting eased the accessibility and purchase of products like motor, life, and health insurance. Today, for example, you can buy travel insurance at the airport if you don’t have one, even if you’re traveling at night. I’d say that technology is playing a crucial role, streamlining a lot of the claim processing and leading to a superior customer experience so far.

How do you view automation’s role in processing claims with respect to the insurance sector?
Automation has played a very critical role. In motor insurance, for example, claims below one lakh are processed using a system without human intervention, and the same for travel to some extent. In health, engines are not only processing claims but also reading documents through the system. Overall, technology and automation have reduced human errors by many folds and eventually improved the customer experience. Today, health insurance claims are processed instantly, and the money gets fed into the customer's account immediately in case of reimbursement (or the hospital account for cashless claims). In the end, automation helps build trust with the consumers, thereby helping to achieve the goal of insurance for all by 2047.

How is insuretech addressing trust issues among customers?
I think insurtech companies have brought a lot of transparency to the perceived complexity of insurance. Customers ought to know what they are purchasing for a certain amount. That’s where insurtech companies prove essential in establishing trust with consumers. Trust is built when there is transparency, both in the product that the customer is buying and the price that they pay.

How is technology transforming training and development programs for insurance agents?
Let me start with an example. When you tell somebody to buy term insurance or health insurance, eventually, it's a piece of paper, a promise. But if the guy who's selling it is not equipped to handle queries, then the consumer would not buy it. Hence, I believe nuanced training and development programs have basically enabled the clarity of distribution among agents or brokers on the kinds of products that exist, allowing consumers to understand why the term insurance or health insurance is good for them. Today, the life insurance industry has roughly 20 lakh agents in the country, and training 20 lakh people physically is impossible. Hence, you need technology to train so many people who, in turn, can understand, learn and sell the products to end customers. Hence, technology plays a vital role in the distribution of insurance products.

What are some of the tech-powered training and development initiatives adopted by the industry today?
Insurtech companies are now deploying passive training modules, which record the training, allowing agent partners, distributors or individual agents to go through them at their own convenience. It also includes on-demand training or FAQs, which are pre-recorded; you can go through those training and request any doubt-clearing sessions as well. Also, insurtech companies are creating 30 or 60 second tutorial/training videos to help you revise the topics covered to stay well informed. I’d say these are some of the initiatives that insurtech companies are doing to make training more powerful.

What is the difference that insurance aggregators bring in the process?
Insurance aggregators, again, are simplifying the journeys, ensuring the least friction in understanding the products. For example, products like health insurance come in complicated categories. There are multiple products, and each has multiple variants. Now, for a consumer, it's a jungle out there. Now, the insurance aggregators have these products, simplified and created recommendation engines, giving tooltips to what the consumers are looking for. They not only help consumers make decisions but even encourage them to purchase the products as well.

As a result, technology could bring in superior customer experience, reduce the costs involved because of human intervention, and make products more affordable.

On the motor side, insurance aggregators try to fetch a lot of information using central databases or auto-fetch features on matters like engine number and Goods Consignment (GC) number. This basically creates awareness and simplifies the buying journey, enabling customers to make purchases within minutes.

How should insurtech companies make products affordable for residents in tier III and below regions?
With respect to the tier three and below regions, the capacity for somebody to buy a health insurance product, for instance, of a five lakh cover, the average ticket size will be 20,000. To create a product cheaper than 20,000, the aggregators or the insurance companies are saying to reduce the cost involved. If the distribution costs go down, then you can reduce the premium from 20,000 to, let's say, 18,000 or 15,000.

Currently, several insurance companies, aggregators, and brokers are either enabling digital access for these consumers with less human intervention or empowering agents with superior tech for offline distribution. The productivity is high, and the cost of distribution is low. Additionally, thanks to technology simplifying the consumer's awareness creation process, agents can use the platform to help them make decisions with fewer meetings. Not only does this free up the time for the agent to do more meetings, but it also increases the number of policies they close monthly. As a result, both the commercial and the distribution costs can go down, eventually helping to reduce the premium.

What is your future outlook on technology revolutionizing the insurance sector?
I think tech is and will continue to play a crucial role in the insurance industry. It will continue to build trust among consumers in the distribution community while also making products more accessible and simplifying the claims and underwriting processes and risk assessment. As a result, technology could bring in superior customer experience, reduce the costs involved because of human intervention, and make products more affordable. Eventually, all of this could hopefully lead to insurance penetration going up from where it is today, not just in the metros or tier one cities but tier two, tier three cities and rural areas as well.

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