NEW DELHI: Insurance tech startups, or insurtechs, are changing the way a retail customer buys insurance. Insurtechs are now present across the value chain – from the selling of a policy to claims settlement.
The insurance sector has been witnessing technological innovations, with big insurers are looking at the Internet of Things (IoT), wearables and big data analytics. Regulators and government agencies have also been actively supporting innovation through enablers such as regulatory sandbox.
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But the covid-19 pandemic has forced insurers to become end-to-end digital. Incumbents have had to collaborate with digital platforms and insurtechs to maximise the opportunity.
"Partnerships between large insurers and insurtechs have the potential to enable more personalised online distribution, predictive underwriting and more efficient claims management," said Alpesh Shah, managing director and senior partner, Boston Consulting Group.
Boston Consulting Group and India Insurtech Association captured some of the innovations in the sector that are helping buyers.
BITE-SIZE INSURANCE
Insurtechs have introduced bite-sized insurance that caters to specific needs of a buyer. Their focus is on small transactions related to travel and e-commerce, offering protection at the point of consumption.
Acko General Insurance, for example, has tied-up with more than 20 digital platforms across retail, travel, finance, point-to-point delivery, etc., to distribute bite-sized insurance. Its ride insurance provided on Ola has insured 23 million rides in less than ten months.
Toffee Insurance, another insurtech startup, offers products such as insurance against theft or damage to cycle and accidental injuries related to a fitness activity or sport.
Digit Insurance has come out with home content insurance to target people living in rented accommodation who want to protect their belongings and not the home structure.
"The lower ticket size and end-to-end digital fulfilment of these products make it easier for individuals to buy them," Shah.
NICHE SEGMENTS
Changing lifestyles, diverse interests, and increasing awareness of insurance are driving new-age demand for specialised products, and several firms have swiftly introduced offerings to cater to such niche segments.
Examples include Toffee Insurance's mosquito insurance to cover seven mosquito-borne diseases and One Assist's insurance for cyber threats.
PROTECTION VS PREVENTION
Some companies are adding a risk-prevention element to their offerings, which benefit both customers and insurers.
They have products that enable customers to reduce risks. These include gym memberships, monitoring devices and so on. Beyond monitoring, these offerings also enable timely interventions that can impact the wellness of customers.
BeatO, for example, has a comprehensive wellness offering for diabetics with connected glucometers, strips, and unlimited doctor consultation in addition to the insurance cover.
Insurers are also targeting services beyond insurance to improve customer engagement.
In addition to payments, Paytm, for example, has a host of additional offerings such as e-commerce, mutual funds, insurance and so on.
Access to all services on one platform helps drive customer stickiness. Such ecosystems also facilitate the capture of rich data regarding customer behaviour and transactions, enabling personalised campaigns and targeted offerings.
Insurtechs are not just selling their products directly to consumers. They are also tying up with insurance companies to make their process better for end-users.
For example, Symbo Insurance's PoS (point of sale) platform provides efficient recruitment, onboarding, and empowers agents to sell insurance and seamlessly service their clients.
Symbo Insurance has extended this to insurers in a white-labelled and customisable manner. It has tie-ups with insurers such as Cholamandalam.
The next big thing could be blockchain contracts, where the customer won't even need to file a claim. As soon as the event occurs, payment is automatically triggered. Bajaj Allianz General Insurance already has a travel insurance product that uses blockchain to settle claims on flight delays automatically.
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