That’s all the more reason that the tech engine is right for digital startups in insurance space. Many of them in India are trying to sell covers that traditional insurers could not — like insuring bicycles or introducing sachet type products with premiums as low as Rs 20.
In an e-mail interaction Girish Kannali, vice president & general manager, insurance & healthcare business unit, Infogain, discusses innovations in the insurance sector and more. Infogain is a mid-tier tech services company with a strong presence in the insurance vertical. Edited excerpts:
What are some of the tech innovation in the insurance sector?
The insurance industry is one of the last industries to adopt technology innovations compared to its peers in the BFSI segment. Now the changes are happening at a rapid pace and some of the following technology innovations are disrupting the traditional business model.
Machine Learning coupled with Artificial Intelligence-based solutions getting embedded into the existing solutions helping insurers, first to automate the processes to make it easier, faster and more accurate. Second to make it more intelligent and enabling to predict as well assist in managing fraud.
Data from Internet of Things (IoT) & advanced sensors is enabling insurers to more effectively model risk and underwriting policies. Smart house monitoring systems will give homeowners and their insurer’s data on, and control over major risks and in turn enable to minimize the claims and losses.
Telematics will impact car insurance. It will be transformed by connected devices as telematics can transmit valuable data for assessing an individual’s risk profile and driving behaviour.
Health and life insurance will be transformed with wearable biometric sensors, such as Fitbit, that provide insurance firms with unprecedented data on the health of their clients which in turn help to proactively better manage the overall health, behavior and the cost.
How is the insurance sector using or planning to use Artificial Intelligence (AI) and Machine Learning (ML)?
Many insurance solution providers are planning to embed AI and ML technologies to their existing solutions to make it better, intelligent and faster. These solution providers have a vast amount historical data which enables them to build a better predictive model to manage the risks as well contain costs effectively.
They are also looking into creating a newer solution which will replace the old traditional way of managing claims. One of the more recent examples is that we developed a ‘photo based estimation model using the ML/AI technology’.
How does Infogain see the insurance sector evolve in India?
Insurance reach is still very low in India – sub 5% providing a huge underserved market. The Indian insurance industry is expected to grow to $ 280 billion by FY2020 (ASSOCHAM-APAS study), owing to the solid economic growth, increased life expectancy, innovative products and higher personal disposable incomes in the country. Strong growth in the automotive industry over the next decade would be a key driver for the motor insurance market (Indian Insurance Industry Analysis – IBEF”)
In the recent past government has approved the ordinance to increase Foreign Direct Investment (FDI) limit in the Insurance sector from 26% to 49% which would further help attract investments in the sector.
Do you think start-ups may have an edge in coming up with better and more innovative products to target potential customers? (Like Re 1 cover for accident, missed flight, etc and using AI, ML)
Absolutely. Look at what happened in the US in the last four to five years. Many new players like Lemonade, Metromile have disrupted the traditional model and increased the userbase. With the adoption of AI and ML, today they are in a position to create a better, predictive model to assess the risks and offer very competitive products to the consumer segment.