We live in a world where the existence of a digital space is taken for granted. It has innumerable things to offer, ranging from the largest repository of knowledge to the fastest network of communication. It cannot be denied that the ability to access anything and everything on a mobile phone or tablet gives us a sense of accomplishment, of being on top of things. Such a scenario necessitates that the functions that individuals conventionally performed in the physical environment also be shifted to the digital space.
What is the need for digitalisation?
[su_pullquote]We live in a world where the existence of a digital space is taken for granted.[/su_pullquote]
The insurance sector recognises this need for digitalisation. As the presence of other sectors like retail and travel expands in the digital sphere, stakeholders in the insurance sector realise the benefits of tapping into digital technology. Numerous problems faced by firms in the sector, like cost pressures, multiple KYCs, lack of background information on customers, claims management, fraud, storage of documents, and lack of customer profiling, can be avoided through the shift. For insurers, it offers a large space which is accessed by millions of people, thereby increasing their visibility and subsequently raising sales and profits.
By going digital, insurance turns into a customer-centric service which uses sophisticated analytic tools to provide the most suitable policies.
It enables customers to identify and choose the policy that is most appropriate for their needs, and modify it according to the changing circumstances. Owing to the internet’s relentless quest to spread information, the customer is now a knowledgeable consumer who can avail services at his/her behest. Be it life insurance products or core insurance products like health insurance, there is no longer a need to depend on an agent to identify the best plan. This consumer-focused product approach is one of the biggest advantages of digitalisation of insurance, which has led to an enhanced customer experience.
Increasing digitisation is doing away with the need for such measures | Picture Courtesy: PixabayOther benefits of digital insurance
Moreover, digitalisation has kick-started a process wherein the customer can directly connect with the business enterprise. Apart from facilitating better evaluation and easier transactions, the process has compelled insurers to improve their interfaces and develop a better online ecosystem. The insurer has the responsibility to ensure that the consumers are exposed to the necessary planning tools, product content, and selling points to make an informed decision.
[su_pullquote align=”right”]In India, some government policies have given the necessary push for digitalisation of insurance.[/su_pullquote]
In India, some government policies have given the necessary push for digitalisation of insurance. The government has expressed its aim to improve digital literacy and to incorporate digital technology in all spheres. It has spearheaded the process of creating a digitally-inclined and more knowledgeable nation through campaigns like ‘Digital India’. Through actions like Unified Payment Interface and mandatory uploading of e-KYC by insurers, the insurance industry is preparing itself for a more active digital presence.
Who do we thank for digitalisation?
One of the most important contributors to the digitalisation of insurance sector in India has been the mandatory setting up of e-insurance accounts. The Insurance Regulatory and Development Authority of India (IRDAI) has made it compulsory for all insurers to set up e-insurance accounts for its policyholders. The objective is to simplify the storage and retrieval of policies and to move away from physical documents and paperwork. Procedures like changing the nominee’s name will become easier, and real-time access to policies will make the system more transparent as well as efficient.
With digital insurance, it’s now easier to manage payments and paperwork | Picture Courtesy: PixabayFor the insurers, such a policy offers a chance to expand their customer base. By monitoring their account, insures can pitch other relevant policies to consumers who have already availed certain policies. It also eases their interaction with the customers by deeming physical documents and office spaces redundant. Moreover, digital presence allows them to improve the branding of products and make them more visible.
While the move from a bureaucratic, paperwork-based insurance sector to a digitally-active insurance sector using sophisticated tools has been initiated, the opportunities are yet to be fully used. The technology currently in use can be modified to make the customer experience smoother, and the process of digitalizing policies needs to be boosted. Nevertheless, the digital revolution has ensured that the time and effort spent by an individual on availing essential services like insurance is reduced drastically.
Featured Image Source: Forbes
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