How digitalisation can bring down your insurance cost, ensure lower premiums

Digitalisation has spread its wings across number of sectors in India and insurance industry is one of them. Growing number of smartphone users, internet connectivity and data dependency has propelled digitalisation among insurance providers and their customers. Fortunately, digitalisation is not restricted to smartphones, applications, internet or online services any more, and has moved one step ahead now, to Artificial Intelligence. According to a recent study by Microsoft India, by 2021, Artificial Intelligence (AI) will be more than double the rate of innovation at organizations (x2.2 times) and employee productivity (x2.3 times) in India. 

Millenials would find it easier to have an insurance product online, get it known through a chatbot, pay premiums automatically and claim it as fast as possible in the world of digitalisation. Anik Jain, Co-Founder & CEO, Symbo Insurance believes, digitization has a role to play in effective delivery, claim settlement and distribution cost of insurance products and services. These areas and hence bring down insurance cost for customer.

How digitalisation is helping people to avail in efficient and effective manner?

''A very significant part of premium paid by customer is allocated to administrative & distribution cost, non relevant insurance covers bundled in one size fit all products and inefficient delivery & claims processes. Digitization has a role to play in each of these areas and hence bring down insurance cost for customer. Last few years efforts by innovative distribution channels have helped improve transparency in insurance purchase process hence reducing mis-selling,'' mentioned Jain. 

Anshuman Verma, CMO & Digital Officer, DHFL Pramerica said, ''For insurers, digitization helps in expanding their footprint and leveraging low-cost digital distribution channels for sales and service, which eventually deepens their market penetration. Today, prominent insurers have made online provisions whereby you can avail the policy that you need. The information is directly fed in the insurer’s database and with no intermediary involved, the insurer saves on agent commission, the benefit of which is passed to you in form of lower premiums.'' 

Benefits of digitalisation in insurance sector

1. No or minimum agent intervention has led to low premiums

2. 24×7 Communication with chatbots has eliminated pending greviences

3. Health tracking gadgets have become future, helping insurers to provide suitable products

4. Complete transparent and detailed data available on your six inch screen

5. Easy and quick processing of claims due to AI

Digitization can prove to be a game changer for the whole insurance sector. According to a BCG survey, by the year 2020, digital insurance will grow by 2,000 per cent from its current state with a total turnover of Rs. 15,000 crore. The survey also said that in 2 to 3 years, 75 per cent of insurance purchase decisions will be powered by digital channels.