Digital Insurance: Insights on Digital Trends in Insurance Industry

Team AckoFeb 27, 2024

Digital technology is a new force that is driving massive changes in the insurance sector. For insurers, the changing landscape of insurance has led to a flurry of technological advancements in the industry. New digital technologies are changing the way customers interact with insurers. But, what is the future of digitization in insurance? And, how will it benefit the policyholder? Read on to learn everything about digital insurance and its trends in India.

Contents

• What is Digital Insurance?
• Digital Trends in Insurance Industry
  • Buying Insurance Online Hassle-Free
  • Artificial Intelligence (AI) and Automation For Faster Claims
  • New Customised Products for Personalisation
  • Social Media
  • Chatbots
  • Internet of Things (IoT)
• Digital Insurance Companies in India
• Advantages of Digital Insurance
  • Reduces Cost
  • Provides Safety
  • Convenience of Transacting
  • Maintain Compliance and Regulatory
  • Brand Awareness
  • Post-Sales Service
• Digital Insurance Vs. Traditional Insurance Comparison
• How Digital Transformation is Changing the Insurance Industry
  • Operations Are Streamlined
  • Customer Interactions Have Gone Digital
  • Claims Being Processed Automatically
• Familiar Digital Insurance Terms:
  • Digital
  • Digital Insurance Provider/Company
  • Insurtech
  • Digital Insurance-as-a-Service (DIaaS)
• Explore Acko Insurance Policy Online & its Benefits
• Frequently Asked Questions

What is Digital Insurance?

With several terms and conditions, customers find it difficult to understand processes as simple as buying, renewing or raising a claim. Communication is the key here. With digitization, insurance companies can use tools such as websites, apps, email, social media, live chat, text and other digital channels to reach out to customers.

The way insurance companies operate through digital channels and depend heavily on technology to service an insurance policy is known as Digital Insurance. In effect, the insurance company utilizes the digital insurance platform to achieve its business model. Compared to the traditional insurance, digital insurance differs in the following ways:

• Offer a customer-first business approach.

• Offer a variety of channels through which customers can research, compare and buy insurance online without the help of middlemen or agents.

• Offer simplified coverage options.

• Claims, risk assessment and pricing are handled solely on modern and software platforms connected to new insurance-specific technologies.

Digital Trends in Insurance Industry

The use of the internet and mobile phones has witnessed tremendous growth in both India and across the world. And, the insurance industry is not far behind when it comes to harnessing digital technology to scale their business model and strive to offer a hassle-free experience. Digitization in the insurance industry is beginning to gather pace and is expected to be one of the mainstays of insurance companies in India. Below are some of the digital trends in the insurance industry:

Buying Insurance Online Hassle-Free

Buying insurance online has made the entire process easier for customers. Nearly every insurer is offering free online insurance quotes through which customers can choose and buy different types of digital insurance online. It eliminates the need to meet an insurance agent in person. It even eliminates the need to talk or enquire about an insurance product through the phone.

Artificial Intelligence (AI) and Automation For Faster Claims

While shopping for insurance policies, customers are looking for a personalised experience. Insurers are able to harness the results of AI to customise unique experiences for customers. Besides, the high-speed demand of modern customers is taken care of with the help of AI. Through this approach, insurers are able to improve the turn-around-time of claims and change the underwriting process. AI also enables insurers to access more accurate reports in a shorter span of time.

New Customised Products for Personalisation

Instead of a one-size-fits-all approach, insurers offer personalised or customised insurance products through the digital insurance process. Digitization of the insurance market will make on-demand, usage-based or telematics and all-in-one lifestyle products more viable to customers. From micro insurance, flexible coverage options and peer-to-peer products, insurance will become more relevant options in the long-term. 

Social Media

The role of social media in the insurance industry is breaking new grounds beyond traditional marketing strategies and intelligent advertisements. The process of communicating with customers is changing and social media is one of the reasons. This is also a platform for customers to research about the insurance companies, read reviews and even review a product.

Chatbots

Chatbots are digitally generated answers to frequently asked questions, making it easier for policyholders to get information faster than before. The internet has to a large extent reduced or bridged the gap when it comes to turn-around time for several transactions. And, AI chatbots are a good example of cutting down the time frame. Insurers are taking advantage of chatbots to increase their resources with the help of digital technology. It also offers the scope to get customers to navigate various insurance products and services.

Internet of Things (IoT)

IoT is the interconnected global web of digitally enabled devices which is propelling insurance companies to take up important initiatives. Through IoT, insurers have access to a huge amount of data and real-time data of policyholder’s lives. They use this research to create new innovations and opportunities in the insurance industry. While this may take time getting used to, insurance policyholders have opportunities to save some money which was not possible through the traditional method.

Digital Insurance Companies in India

Digital insurance companies, otherwise known as InsurTech companies, are transforming the digital insurance landscape by offering ground-breaking insurance products through innovations. They offer digital bike insurance and digital car insurance through their website or mobile app. One of the digital insurer in India is:

• Acko General Insurance Company: Acko is the country’s first fully-digital insurance provider. The company has eliminated the concept of insurance agents and is offering insurance products directly to customers through the power of the internet. With paperless transactions, Acko has made the whole experience of buying, renewing and registering a claim hassle-free.

For the complete list of digital insurance companies in India, visit the Insurance Regulatory and Development Authority of India (IRDAI) website.

Advantages of Digital Insurance

Insurance companies understand the importance of cutting edge technology since customers want to know and trust they are associated with an insurance company that is utilising the latest technology and tools to give them the best possible experience. Embracing digital insurance solutions are the best way forward, and insurers, as well as policyholders, will quickly witness various advantages, such as:

Reduces Cost

Technology has bridged the gap between the insurance company and the policyholder to a considerable extent. This is possible due to the standardisation and instant and comparable information. The traditional method of marketing by spending high on operating expenses especially in advertising and infrastructure has reduced considerably with the advent of digital marketing. With cost advantage, insurers are able to pass on the benefit to customers. In the absence of an agent or a broker, there is a direct contact between the insurer and the customer.

Provides Safety

Unlike paper insurance policies, the risk of loss or damage to a policy is eliminated. The electronic form of the insurance policy is safe and can be accessed from anywhere and anytime by the policyholder. Also, digital insurance offers a safety net against mis-selling and fraud by brokers or distributors.

Convenience of Transacting

Modern customers require quick and instant resolution to their needs. Online transactions offer the ease of engaging in various insurance-related processes. Besides, online transactions can be done from home and at any time, offering convenience to customers. Also, by digitising the process related to buying, renewing and claims, the entire procedure is simplified, thereby enriching the customer’s overall experience.

Maintain Compliance and Regulatory

Any mis-selling by insurance agents or brokers is eliminated since customers have to go through the entire process of purchasing the insurance himself or herself directly with the insurance company. Customers have the option to compare several insurance companies and their products before selecting the right insurance coverage.

Brand Awareness

Digital marketing strives to educate customers about the insurance company’s products through their website which offers informative and quality content. Insurers can use their social media handles, apps, texts and email marketing to increase the brand awareness among potential customers.

Post-Sales Service

While the initial response during the purchase stage of an insurance policy might give customers the right experience, there is a general impression that customers are forgotten after a policy is sold. However, with digital insurance, post-sales service such as the process of raising a claim is hassle-free offering a paperless translation. Also, insurance companies are using their social media handles to receive feedback and complaints to resolve issues. This way they are able to provide a better post-sales service much faster compared to the traditional insurance companies.

Digital Insurance Vs. Traditional Insurance Comparison

Customers increasingly prefer insurance companies that offer a seamless experience that helps them complete transactions almost instantly. Technology has enabled insurers to scale up their services by improving their operations, streamlining procedures and reducing cost. The below table offers an insight into the differences between digital insurance and traditional insurance:

How Digital Transformation is Changing the Insurance Industry

Digital technologies are changing the way industry operates in the new world. The insurance industry in specific has gone through a tremendous overhaul in recent years. Insurers are developing, disrupting the sector with new and customer-oriented innovations. Following are some of the ways how digital technology is transforming the insurance sector:

Operations Are Streamlined

The traditional method of depending on insurance agents or middlemen is eliminated with interactions narrowed between customers and the insurance company. This is possible with the aid of the internet which has opened the passage to the insurance company for customers. From the process of buying, renewing to raising a claim, almost all procedures are streamlined with digitizing of the operations related to these services. 

Customers can buy insurance policy at the click of a button and receive the policy within a few minutes to their email address. Even the claims process has evolved to offer hassle-free and paperless transactions with cashless facilities. This has helped the customer since he/she does not have to go through the cumbersome claims process required by the traditional insurance.

Customer Interactions Have Gone Digital

Customers are increasingly looking for instant answers to their queries. Gone are the days when the customer had to write a letter to the insurer about an issue or a query. New-age insurance companies are using chat facilities to ensure customers are able to find answers immediately. Insurers have also introduced new technology such as chatbot which has eliminated humans to provide answers to some of the frequently asked questions. This has reduced the time taken to find an answer to a query.

Claims Being Processed Automatically

Digital transformation in the insurance industry has led to efficiencies in its operations through Artificial Intelligence (AI), machine learning and predictive analysis. Claims can now be processed through the ease of a mobile app instantly and have helped insurers to reduce the time in “policy writing”. Some of the digital insurance companies require the policyholder to upload the pictures of the damages sustained by the insured vehicle and raise a claim making it a lot faster compared to the conventional method.

Familiar Digital Insurance Terms:

With newer technologies and innovations becoming part of the insurance industry, it is important to know various digital insurance terms to keep yourself informed. Below are the important terms related to digital insurance:

Digital

It is a term used to describe computerized technology and is very different or opposite to mechanical or manual processes.

Digital Insurance Provider/Company

An insurance provider which depends on technology to transform its operations or customer interactions to reduce the time and cost to provide suitable insurance to customers is called a digital insurance company. They take the digital-first approach for internal and customer-facing operations.

Insurtech

Insurtech is the combination of “insurance” and “technology”. It is a general term used especially to refer to any insurance products, services or companies.

Digital Insurance-as-a-Service (DIaaS)

DIaaS is a 100% digital insurance services that cover end-to-end processes for easier claims management, onboarding customers and customer support. Through this disruptive business model, digital insurers are striving to provide fair, simple and transparent insurance.

Explore Acko Insurance Policy Online & its Benefits

• Online insurance process

• Guidance from trained professionals

• Zero paperwork

• Low premiums

• Zero-hassle claims

• Quick and easy

Frequently Asked Questions

Digital insurance is here to stay and there are new terms and queries that need answers. Here are some of the common questions about digital insurance:

Is the digital ecosystem the future of insurance in India?

The digital ecosystem is an interconnected set of services that enables all digital parties to interact and fulfil their requirements through a single platform. Digitization is being used like never before by various industries. The insurance industry should also adapt to newer technologies and innovations by taking advantage of the ecosystem. This will allow insurers to build new partnerships with other parties and enable insurance companies to leverage their services.

Which are the best digital insurance companies/digital insurers in India?

There are more than one digital insurance company in the country. One among them is Acko which is a fully digital-insurance company. For more digital insurers in India, you can visit the IRDAI website.

How insurers are coping with digital transformation?

Insurance in the traditional sense is rapidly declining as customers prefer instant results and lesser paperwork and easy to understand terms and conditions while shopping for an insurance policy. Insurance companies are either evolving their business to adapt to digital insurance or utilising insurance technology companies to leverage their operations.

Can I opt for insurance through a digital insurance company?

Yes. Digital insurance companies are striving to be transparent and removing middlemen or agents to interact directly with customers. Also, digital insurers have made most of the transactions online making it easier to access and complete process faster for requests such as claims.

Why should I choose digital insurance instead of traditional insurance?

Digital insurance providers are new-age insurance companies who are increasingly focusing on excellent technical capabilities by utilizing modern technologies. Be it pricing, buying experience, raising claims, paperwork and communication, digital insurers are making processes easier and faster, keeping customers as their priority. A digital insurance policy can be bought instantly anywhere, anytime with aid of the internet.

What is digital transformation in the insurance industry?

Digital transformation of the insurance industry is propelled by Artificial Intelligence (AI), predictive analytics, machine learning, live chat, mobile service, etc. This enables insurers to scale their business model keeping customers as their priority to make processes such as buying, renewing, registering claims, etc. faster and efficient.

Related Articles:

• Health Insurance

• Family health insurance

• The Future of Car Insurance: Digital, Predictive And Usage Based

• New-age Insurance vs Traditional Insurance

• Impact of Artificial Intelligence on The Insurance Industry

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