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Photo: Abhijit Bhatlekar/Mint
Photo: Abhijit Bhatlekar/Mint

With digital identities, the need for physical forms is waning

Sandeep Ghosh, chief executive officer, Bharti AXA Life Insurance Co. Ltd speaks to Mint about fintech in insurance

Sandeep Ghosh talks about how fintech can improve customer experience and also allow greater control over insurance distribution.

How has fintech improved the buying experience of life insurance customers? Is there a greater control over distribution?

Insurance being a regulated industry, the requirement of documentation from the customer was humongous. Customers needed to provide proofs for KYC (know your customer), financial capability and insurable interest; to name a few. With the advent of technology and availability of digital identity, this requirement for documentary evidence in the physical form is slowly waning. Fintech has played a major role in this. There is immense value in this process for insurers as well, as the large element of fraud risk is eliminated When a customer is authenticated electronically. It also results in operational efficiency.

We expect the next leap in customer service to be through chatbots.

For a distributor, too, technology has brought forth great value. For instance, the automated need analyser ensures need-based selling. This not only improves the productivity but also gives the insurer more control on distribution.

In the near future, adoption of fintech initiatives like face recognition and smart contracts through blockchain will only improve this control.

Technology also helps us ascertain customers’ health and lifestyles; thereby enabling differential pricing.

Will this year see an even greater focus on protection plans, as the industry is focussing on profitability and the protection products come with the highest margins?

Yes, this year will see an increased focus on protection plans, not only due to the margins but because protection remains the primary objective of an insurer. There is a growing tendency to buy adequate insurance and companies are trying to create more awareness about the significance of protection. Also, with the interest rates in India moving down, protection products will gain even more focus and we should continue to see higher growth, particularly in this segment.

Claims is an area that needs more attention. What are insurers doing in this direction?

Once a claim is intimated, insurers now proactively call claimants to explain the requirements for settling it. In fact, there are now dedicated claim handlers to personally assist the claimant in filling up the forms and understanding claim requirements.

Insurers have now launched programmes to help claimants in time of distress. We recently launched a grief support programme in which a claimant can call a specialist for emotional counselling, legal opinion on Will or even financial planning.

Last year saw mergers and listings in life insurance. Will consolidation and listings increase this year? How true is it that companies without a bank partner are finding it hard to survive?

Life insurance has a longer gestation period. So while all Indian promoters have a strong financial background, it depends on their priorities. They have been involved in insurance only for 5-15 years and only those promoters who understand the nature of this business will stay long term. So yes, more consolidation is expected. The industry has also seen the exit of major foreign insurers. But globally, consolidation in insurance sector is common. India will also see a consolidation phase.

While having a bank partner will strongly support volumes in the short run, insurers without bank partners will take slightly longer to stabilize, given the lower insurance literacy in India and high attrition of agents. Insurers without a bank partner will be successful in the long term if they are patient and keep doing the right things.

Deepti Bhaskaran

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