Digitally Transforming Insurance In The Age Of AI & Automation
The Indian insurance sector has grown over the last few years and secured a CAGR of 10.3 per cent over the last decade, as per the RBI's Financial Stability report released last year. The report said that the general and life insurance sectors had robust growth. This is good news for the industry, which has carved its own identity despite the spends on Insurance being lower as compared to matured economies.
Not anymore. Insurance is today seen by millions of Indians as a safety net for times of adversity. No wonder the market is getting deeper by the day, and as per available data, there are more than 57 insurance companies in the fray in India. This also makes the industry extremely competitive, and each company vying for a more significant market share and looks at a critical differentiator for a unique customer experience.
Digital – A Key Differentiator
In a crowded market, carving a differentiation takes work. It is an industry with its share of legacy baggage in terms of technology, rules and processes. Goutam Datta, Chief Information and Digital Officer at Bajaj Allianz Life Insurance, agrees that the insurance industry has morphed into a progressive sector over the last decade and is currently on the cusp of evolving to the next level of maturity.
"The industry is rapidly embracing modern technologies, reimagining business outcomes by closely aligning technology with customer preferences and compliance. Digital plays a key role in all these areas. With young to middle-aged customers now under the insurance umbrella, we observe a massive uptick in digital interactions, which, for many, has become the primary touchpoint. The levels of satisfaction we can provide are reflected in the positive Net Promoter Score (NPS) we witness every day." says Datta.
What contributes to this robust IT spending on digital transformation in the insurance sector is the need to address speed? Rachit Sahai, Client Partner-Insurance, IBM Consulting, says, "Speed is the essence, and insurance organizations must provide highly customizable offerings to gain customer traction across processes and with turn-around-times (TAT) in minutes and seconds. That customer centricity is what digital transformation is ushering into this sector, and we, as solution providers, address those demanding expectations by enabling their business processes tuned to achieve greater operational efficiencies. Friction-free onboarding of customers is a pivot for business growth, and digital is critical."
Leveraging AI and Automation
The advent of GenAI is creating a seismic shift across industries, and insurance is no exception. Sahai believes that AI and Automation will lead to substantial productivity improvements in insurance and offer companies to develop more tailored-made services, leading to highly personalised services.
"I completely agree on the productivity gains and efficiency aspects. Acquiring new customers today occurs at an amazing speed. Policies are issued much faster, and on the backend, we efficiently mine a substantial amount of data—from risk assessment to relevant policies for our customers. Thanks to AI and digital technology, we can act on this data to produce tangible outcomes that benefits the customer like never before." says Goutam Datta.
"Specifically, regarding GenAI, we are aligning all our key stakeholder ecosystems to achieve greater operational output. We leverage GenAI for contextual support to precisely define our product deliverables for customers and empower our sales force to align seamlessly with customer queries through accurate explanations. We actively use and train our GenAI engine to enhance customer engagement and increase conversions." adds Datta.
Datta says, "By blending Machine Learning and NLP with data and GenAI, we are taking customer interactions and conversions to new heights. From call center operations to sales teams, everyone is empowered with data to address customer queries and provide solutions. GenAI plays a crucial role in empowering us, whether it's delivering contextual responses or achieving higher outcomes".
Securing the Business
How are insurance companies safeguarding customer data and making way for secured digital operations? Says Datta, "Cybersecurity tops our agenda, and gone are the days when we focused mainly on perimeter security; now, it's an integral part of our digital ecosystem. We employ a multi-layered approach to secure our business from a range of threats, ensuring the safety of customer data through the implementation of robust defence systems. Our company is highly interconnected; for instance, our portal is accessed by thousands of users every day, and hundreds of partners do business with us in a connected way, 24x7.We take measures to prevent cyber-attacks in any form. We adhere to a combination of security best practices to fortify our systems."
Security is the fulcrum of digital, says Sahai. "Today, it's a multi-cloud hybrid IT environment. Any security breach will have serious ramifications for the business and the brand. So, we have an approach of attack (understanding and decoding the threat landscape) and defense embedded in our security strategy infused by AI."
As we look towards the future, the insurance industry finds itself poised to embrace AI-driven disruptive changes. Despite initially trailing behind other financial sectors in digitalisation, significant strides have been made since 2015, marked by increasing Foreign Direct Investment (FDI), currently at 74 per cent, with a proposed 100 per cent FDI by the government. These inflows have sparked a transformative shift within the sector, empowering Indian insurance companies to integrate global best practices and processes, thereby enhancing customer experiences. Notably, India has emerged as the 10th most significant life insurance market and the 15th largest non-life insurance market, demonstrating consistent double-digit growth. This trajectory sets a promising foundation as we chart the course for the future of the insurance landscape.
Master Strokes is a series produced by BW Businessworld and Presented by IBM India. This series will present the efforts and accomplishments of technology leaders across sectors on how they use and continue to leverage technology to bring about business transformation, positively impacting their organizations.
