The life insurance industry in India is still in the nascent stage. The Economic Survey 2018 indicated that India’s life insurance penetration is just 2.72% as of January 2018. While this is alarmingly low, there is a potential for huge growth in the upcoming years. Most industry experts believe that India’s life insurance industry will witness a huge growth in the coming years propelled by economic growth of the country and increased awareness among the general public. Technology is considered to be one of the factors that will have a huge impact on the insurance industry’s growth.
Some of the technological changes in the industry are already being witnessed. However, this is all set to change even further in the upcoming years. Most of these emerging technological trends focus on improving the experience of customers. For instance, the use of artificial intelligence for claim processing has already been adopted by some general insurers in the market. Considering this changing scenario, let’s take a look at some of the major technology trends that could heavily influence the life insurance industry in the coming years.
Gamification is a new technological trend that is transforming various industries. In life insurance, it is primarily used to drive customer awareness and engagement. One of the reasons behind the poor insurance penetration in India is the lack of awareness. Gamification involves the use of game techniques to increase knowledge about the benefits of life insurance. While increasing sales is the ultimate goal of most companies, this technology also helps them educate their customers and improve engagement.
The life insurance industry is expected to witness a surge in the upcoming years. This means that there will be a huge influx of customer data in the near future. Most companies already have some methods to sort through their customer database. Data analytics can help insurers by providing them with key intelligence about customer preferences. Most importantly, it can help prevent fraud and waste in the life insurance industry. With the help of real-time data, insurers can analyse the risk in the industry and price their products accordingly. Even for activities like claim processing and customer servicing, data analytics is all set to play a major role in the near future.
The year 2017 witnessed the explosion of blockchain technology in the form of cryptocurrencies. While the full potential of cryptocurrencies is yet to be witnessed, this trend made various parties explore the use of blockchain technology in other avenues. Blockchain technology primarily concerns maintaining a decentralized form of shared records. Even most of the skeptics of this technology do not question the security offered by this technology. It is expected that the life insurance industry will use this technology for maintaining its database and processing claims. This is likely to help them minimise their operating costs and improve their bottom line.
Chatbots are not new in the insurance industry. There are many general insurance companies that already have chatbots to assist their customers. In the future, it is likely to witness further growth as there is an increase in demand for information from customers. Chatbots can help customers by providing them with the relevant information about life insurance. Certain processes involved in life insurance could be tedious for customers who have limited information about the industry jargons. With chatbots, they can get access to relevant information easily.
Automation is one of the major technology trends that has reshaped many industries around the world. One of the major reasons for automation can be attributed to the need for better administration of insurance policies. With a significant increase in customer base, companies must now rely on various automation techniques for claim settlement and fraud detection. Some companies in the world have already started experimenting with this technology. With the estimated growth potential of the life insurance industry, this is certainly a transformative technology that could aid insurers in the long run.
Insurance companies have already started investing in cybersecurity owing to the huge influx of customer data. In the coming years, this is likely to expand even further. Data breach is a risk for all major businesses in the world and the life insurance industry is no exception. Insurers are likely to incorporate new technologies in cybersecurity in a bid to counter the rising threats in the cyber world. The use of technologies like artificial intelligence and data analytics comes with its own set of challenges with regard to security. This is all set to affect cybersecurity in the near future.
Technological innovation is nothing new to the life insurance industry. Over the course of time, the industry has witnessed many changes with regard to technology. Other technologies like telematics and wearable devices are expected to have an impact on the general insurance industry in the coming years. However, they may not have a profound impact on the life insurance industry yet. On the other hand, the ones listed here are some of the major trends that could transform the life insurance industry for good in the near future.
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