Category: InsurTech

In today’s unstable economy, all of us are thinking about all the possible ways to save up some money each month – reducing fuel consumption, consuming the least amount of electricity, using online discount offers for getting groceries, and what not! But one very important way to save money mostly goes unnoticed by us. Yes, the evaluation of our insurance policies. Most of us have various insurance policies from various companies that can easily be bundled together, and the benefits of bringing them under one roof are astonishing. Some call it multiline discount. Multiline insurance in simple words is a bundled insurance coverage that covers the risks to different exposures and covers all of it under a single contract. Though the concept has been in the rounds for quite some time, however, not many of us are aware of it because of certain reasons. When it comes to insurance, it is dominated by a certain set of habits. When we think of health insurance, we usually end up selecting the same company as our parents or friends. This happens because we prefer familiarity over quality and money. Though this is a simple selection, we often end up with multiple companies covering multiple risks for us, and the price that we pay is huge. Let’s look at the benefits of bundling insurance policies to judge whether bundling is a wise choice, or not. 1. Savings The most obvious and well-known advantage of bundling all your insurance policies under one company is the savings you make. TrustedChoice.com, a leading digital insurance marketing platform, revealed that usually, companies offer a discount rate of 10-15% on bundled policies. Certain companies offer up to 30% discount on each premium if any customer bundles three different insurance policies! So, if two of your insurance policies from two different insurers add up to $2000 annually, upon bundling them you would get a minimum discount of 10% which means you get to save $200 per year. Go on, hurry up and calculate your savings! 2. Centralized Premiumness Apart from the savings, multiline insurance also helps customers enjoy a premium experience. Having all your policies under one roof means that you are no more required to deal with multiple insurance companies or their agents. Bundling policies under a single company means you get one bill and a single point-of-contact who will help you out with all your insurance-related queries and concerns. You also get easy access to all the information about your insurance policies in one place without having to fret over having to log into multiple accounts. This also makes the claims process easier and faster. 3. Hyper-personalized CX Another interesting advantage of bundling is making good use of data analysis to offer unique services to each prospect. Having a one-to-one conversation with a representative from the company or the agent will give them a deeper understanding of your insurance requirements and your financial situation. Therefore, they will be able to offer the right set of policies, look for potential savings, and inform you about great deals and discounts that you can opt for. Making any amendments in any of the policies also becomes easy when you have just one insurance provider managing all of them. This not only ensures that you save a few thousand bucks but also allows you to be stress-free. In conclusion, if you need more than one policy for yourself or the family, it is always better to opt for multiline insurance. And if you are wondering which are the top multiline insurance providers that you should check out, then we have the updated list here.

“Global Incidence of Insurance frauds sums up to 3.58% annually”– Global Claims Fraud Survey. In many countries, it takes up to 8% of its revenue annually. Now, that is a huge concern for the Insurance Companies.  The sudden outbreak of COVID-19 and the resulting pandemic has acted as a catalyst for the insurance sector as the demand for health insurance has increased profoundly. In countries like India, where only 10% were previously interested in securing their health by buying health insurance, this has increased to 71% The average claim size has increased manifold in the recent turbulent time. Surveys say insurance companies are taking a vast hit from the pandemic. Another problem that arose amidst these is the “Insurance Scam.”  A worldwide lockdown has paused many businesses’ operations, therefore leading to loss. As profits dwindle, businesses fail to cover up the average variable cost, pushing many businesses towards bankruptcy. Thus, increasing incidents like staged thefts, torching machinery, fake injuries, medical scams, vehicle scams, etc.  Hence, there is an urgency to exploit analytics to detect potential threats. In the upcoming section of the blog, we will discuss how insurance companies can exploit analytics to prevent scams.  Predictive Analytics In a legacy model, insurers depend largely on intuition to detect false claims. Intuition fails, and many times the failure rate is quite high. In the pre-covid situation, insurers visit places to cross-check and validate the documentation of the reported events. Covid has stalled the legacy procedure because social distancing is the new normal norm that has to adhere strictly to combat the virus. Hence, insurers are heavily relying on analytics to overcome these challenges.  Moreover, we came to know about more challenges that insurers face while providing them with our digital solutions. Among them, the most common one is the detection of outlier claims. If done manually, fraud detection is an exhausting process, and insurers consistently focus on reducing the cycle time in this fast-paced digital era. Chances of fraud getting undetected increase if the manual process is followed. Today, Data is linked to various sources, and the right integration can make detection easier. Thus, insurers are harnessing digitization by deploying predictive analytics to detect or prevent insurance fraud. From our client testimonial, we found the benefits they reaped by deploying predictive analytics to detect a false claim. So, the claimant documented a scene where his factory caught fire. The story was so compelling that detecting the staged event manually was next to impossible. Predictive analytics then came in handy. As claimants file up, advanced clustering techniques are used to categorize different clusters with the level of frequency for claims. The algorithm model calculates the probability of the claim being above the threshold level. If it is above, then it will directly go to the special investigation unit.  With the help of historical data and real-time data, by using predictive analytics, early detection of fraudulent claims are possible. Datasets gathered from the claimant’s interaction on social media platforms on their lifestyle and other social factors were used as sentiment analysis by deploying advanced algorithm models to further help in detecting false claims. For example, if a claimant’s check-in location on social media platforms is different from the reported location of the incident during that particular time, the advanced algorithm could track it and defend the claim.  Speech Analytics Insurance companies are also using voice analytics or emotion analytics to detects the claimant’s false claims by analyzing their voice data. Speech analytics uses crafted mathematical and statistical algorithms to detect any fraudulent activities at the FNOL (First Notice of Loss) stage. If a person sounds different than the demanded situation while filling up the claim in the open conversation, AI attached to it will detect the anomaly and send it for further investigation.  Speech analytics can further be used for the following benefits apart from detecting frauds:  Speech analytics with trend-based studies can ease the burden on call centres for sudden calls during natural calamities.  Speech analytics can monitor the timings of the calls and the factors behind fuelling cost. Thus helping in minimizing expenses.  Voice analytics can intercept every conversation with the insured and flagging the one demanding deep sighted conversation with the insurers.  Telematics Telematics can be exploited as an advanced investigating tool for detecting insurance fraud. Telematics can signal out high-risk behaviour such as driving above the safer range. If the signal is ignored, then the claiming process can be deterred. Also, data from the accelerometer can be used to identify the car’s speed during the crash.  Deploying ML and AI in the Dashcam helps in identifying the truth of the incident. Regular real-time data collection on the driver’s driving performances have consistently monitored them, thus preventing accidents or false claims.  Telematics also helps in profiling the driver’s behaviour in the motor insurance sector. Motor insurance rewards the driver with a lower premium if his driving skills fall under a safer slot. This kind of insurance is also known as Usage-Based Insurance. Final Take Away Insurance companies worldwide are likely to favor digital disruption to stay future-ready to navigate through unforeseen crises. Insurers normally follow the legacy model that depends on the manual process, but a sudden outbreak of COVID-19 doesn’t permit us to follow. Social distancing and economic downturn only exacerbate the problem. The role of technology is becoming more crucial every day. The acceleration of digitization premature due to the pandemic. Emerging Leaders in the insurance sector exploit analytics for decision making in insurance-related operations such as claim settlement, policy administration, underwriting, and fraud detection & prevention.  Let us delve into the major take away: Leveraging telematics to measure risk score using data scores from wearables can flag any risky event and proactively communicate with the clients to minimize the risk.  Leveraging speech analytics to detect odd claim patterns by analyzing audio to prevent loss.  Predictive Analytics helps insurers re-running the analysis based on the data trends followed in fraudulent claims to prevent further loss.  Digital solutions also

Breakthrough innovation by leveraging digital disruption can only mitigate the crisis that insurance companies are facing. The urgency of having general or life insurance wasn’t felt much until pandemic struck the world. With a deadly virus and the risk of climatic change, it has become important to understand the worth of having insurance. But then it is not a one-way process, prospects understanding the worth of insurance and companies understanding the importance of providing seamless experience go hand in hand and that’s when digital disruption comes into the picture.  Dr Rakesh Agarwaal, editor of the journal, The insurance Times, who also authored more than 30 books on insurance mentioned that “COVID gave much necessary push in the insurance sector”. But is it the ultimate driver for digital transformations and growth in the insurance sector? Well, Digitization was already present in the market but the acceleration of the process happened now. The insurance sector is more prone to digital disruption than any other financial service companies. Adoption of digital payment mode by various banks, initiatives taken by the central government of India and insurance regulatory agencies such as IRDA has formulated and taken a few steps to combat with the prevailing situation.  There are various areas in which innovation can take place in the insurance sector such as Insurance solicitation, product underwriting, claim settlement and services. Innovation will help in providing tailor-made insurance, reduce cumbersome paperwork, automated documentation and fast-paced KYC process. Such digital disruption will reduce the timeline by making the process faster. Regulatory is also leveraging AI, IoT, big data, telematics and etc to bring out innovation in these areas.  As policyholders are choosing digital web aggregators to compare, purchase and settle claims, the sector finds it as an opportunity to adopt the new way to stay ahead. Sustainability lies in the mindset of customers. Today the world is going through a pandemic and tomorrow it will be over. But does that ensure that there won’t be a graver issue in the future? We will never know and therefore adaptation to innovation which was not present earlier is the only way to stay prepared. Insurance companies must focus on building technologies with the software technology companies backing them up with digital solutions and scale their operation for the remote workplace.  Creating digital front end technologies and formulation of effective strategies to balance human touch and digital solutions has catered to every touchpoint of customer path which increased the value proposition holistically. It is important for the strategies to be flexible and have a personalisation approach.  To test innovations, IRDA has allowed sandbox to bring an innovative product in the insurance sector. Sandbox is a workspace to experiment, test and innovate financial products, this also helped in containing the loss before applying it on a large scale.  We have heard the concept of the remote workplace in the IT industry but can it be a sustainable model in the insurance sector? Penetration of insurance is low in remote parts of the country and even in tier II and III cities. Dr. Agarwaal has made “Lack Of Education” the root cause of it. After 73 years of Independence, the penetration rate is hovering around 3.7 percent. Digitization is the only way to increase the sales of the insurance product, enhancing the efficiency of operation. Further, technology adoption will reduce the cost by disqualifying the option of having a physical entity in every city and villages.  Digitization is viable in an ecosystem with proper infrastructure. To be successful, we need to create massive awareness for digitisation. One such initiative by the Government of India which helped in educating farmers and lower-income groups about insurance is Jan Dhan Yojana, where the villagers need to open bank accounts and buy small ticket size insurance of Rs. 30 or Rs.40. In that way, people who were unaware of such a product came to know about it and thereby increasing the penetration rate. Due to COVID, many new dimensions have opened up for the insurance sector such as insurance for business interruption, loss of jobs and other high demand OTC products. As physical inspection for claim settlement is not possible hence it slowed down the process. Therefore live streaming for inspections, adoption of machine learning, continuous automation have increased the speed of processing claims. Automation with analytics has also helped the decision-makers to analyse the claims correctly and also reduced the cumbersome paper works.  Robust claim processing and integrating various products with product insurance has expanded its market. Suppose you are buying a phone from any e-commerce website, you will see an option for ad-on insurance at a minimal price. Customers won’t mind to buy it as it provides insurance to theft at a very low cost. Sachet insurance has become the new trend and has full potential to evolve over time due to its simple and easy to buy feature, it requires less documentation making it more popular among youngsters. It is convenient and also gives them the opportunity to ignore complex procedures. Sachet also caters to the temporary requirements and has the potential to avoid incurring a major loss on the premium paid if not renewed on time. Though innovation is always accepted with open arms, it does invite some of the challenges. Breaches and data security posed as a major challenge and thereby it is important to have a strong infrastructure with special focus on these.   Is India mature enough to take all these innovations? Today’s millennials want everything swift and seamless. Automation has helped them in receiving their answer to the query within microseconds. Web aggregators provided policy holders with a comparison chart and the rates that each company is charging on insurance. This helped in having greater transparency.  Changing mindset and staying agile towards digital adoption will make India prepare for it.

As severe weather occurrences continue to hamper life across the globe, P&C insurers are feeling the pinch owing to their frontline position in the life and property damage scenario. Simply put insurers are paying out more to policyholders as extreme weather events such as flooding, droughts, storms and heatwaves become more frequent and more severe. Asset Owners Disclosure Project states that natural calamities occurring due to climate change has a direct implication on an insurer’s business valuation. Insurers suffer from financial losses, regulatory and technology changes, and liability risks that impact their business operations, underwriting, and financial reserving. Natural calamities have been integral to mankind, so why bother now? Ongoing climate change triggers “secondary perils” such as wildfires, flash floods and hail storms in short intervals, which in turn makes it the highest contributor in terms of damage caused to property and life. As per a Reuters analysis, average insured loss caused by “secondary perils” during 2010 – 2018, was almost double when compared to “primary perils”, such as earthquakes and hurricanes. These “secondary perils” are localised in nature and hence insurers need to analyse the events on a case-by-case basis. Popular sentiment among industry stakeholders is that these events are relatively costlier. If covering “secondary perils” become costlier, will the industry be able to maintain its price competitiveness?  A steep spike in the occurrences of “secondary perils” will force insurers to adjust premium pricing and alter risk calculations. Munich Re has already included discussions on premium pricings as part of its strategic agenda, with clients holding asset concentrations in ‘vulnerable parts’ of its markets. Munich Re’s insurance cover in hurricane-prone regions such as Florida is already higher than in northern Europe, by an order of magnitude. The company is actively adjusting its premiums for regions which face threat from “convective storms” caused by global warming. These terms are mostly levied on parts of Germany, Austria, France, south-west Italy and the US Midwest. “If the risk from wildfires, flooding, storms or hail is increasing then the only sustainable option we have is to adjust our risk prices accordingly. In the long run, it might become a social issue, Affordability is so critical [because] some people on low and average incomes in some regions will no longer be able to buy insurance.” – Ernst Rauch, Chief Climatologist, Munich Re As insurers are forced to increase their premium prices, the average customer will find it increasingly difficult to afford financial protection that they deserve and hence will pose a grave danger to the social order. Fortunately, the saying “it is never too late” holds true here and digital technologies are being looked at for a fitting answer to combat negative business implications arising from climate change.  “Hyperlocal” weather data such as precipitation, tides, erosion & subsidence, waves, sub-surface flow, temperature, humidity and wind is being looked at to improve insurance pricing models. Such data is fetched from technology platforms including ground and orbital sensors, wireless and cable network signals, and climate projecting algorithms. Based on these factors, localities are marked on “hazard maps” and customers are charged premiums based on the localities they live in. Advanced weather tech companies are coming up with their predictive and assessment tools featuring highly accurate weather database which boast over 90% accuracy in urban areas, 300-500m geo resolution with an update interval of 60 seconds. Insurers are now in the position to utilize predictive models which can account for climate variables from an hour to more than 50 years down the line. These tools are designed to empower decision-makers with interactive maps, and reports, through an API framework. Hyperlocal Weather Data Forecast Framework Let us look at some of the established insurers to have adopted “hyperlocal” weather and climate data for improving underwriting and insurance pricing, and better risk assessment. Allianz Re senses temperature, humidity and wind in real-time to present an interactive hazard map featuring information on floods, tornadoes, hail, earthquake, tropical and extra-tropical storms. Allianz Re plans to use the product to effectively assess the risk of wildfire anywhere in the world Hiscox assesses damage from a catastrophe by collecting images and data. Hiscox expects the product to help it set premiums more accurately Other insurers are increasingly showing signs of factoring in climate change into their business model with digital technology forming the backbone for the success of the model. Munich Re has been progressively working towards tackling climate change. The insurer considers perils to evolve with time and is presently considering flash-flooding at the top of its threat matrix. Last year the reinsurer focused more on drought and added “wildfire layer” to one of its digital risk assessment tools Zurich Insurance is presently planning refinement to its flood risk modelling for impeccable accuracy, by analyzing granular details of vulnerable areas. For instance, the company wants to distinguish between a house at high risk of flooding and another 10 meters away that is less at risk. Its current model works with distances of around 100 meters London insurance platform Lloyd’s, whose member firms recorded a loss of 1 billion pounds in 2018, driven by hurricanes, typhoons and wildfires, invited ClimaCell to join a ten-week innovation lab program Insurers are mostly reacting to losses incurred, rather than proactively preventing, at least trying to prevent claims from happening We at Indus Net Technologies firmly believe in the philosophy “prevention is better than cure”. Preventing a claim incident from occurring remains the best possible approach to running a successful insurance business. Let us take a look at insurers who have already taken a leap towards hyper-local weather analytics and are on their way to prevent potential claims: Pacific Specialty leverages a network of ground sensors to collect granular data across 5 stations in 5 US metro cities. This sensor network helps Pacific Specialty to record individual hailstone impacts and wind guts to manage hail storms QBE uses a network of ground-based and orbital sensor data with climate projections to assess climate risks and gain efficiency

Gamification of insurance has been in the market for quite some time now and has been deployed mainly for creating awareness, promoting compliance, and simplifying complex processes. Few prominent insurers such as American Family Insurance, AXA, Allianz and Lawley Insurance had adopted gamification in as early as the year 2012. It has been a great marketing tool to provide customers with all the necessary information without any human intervention or boring bot-based interaction. For instance: American Family Insurance collaborated with WildTangent and Mindshare Entertainment to develop its ‘iAMFAM’ game which allows users to create avatars and manage activities such as buying a house and planning a career. The game then helps users decide which insurance to purchase at what point in time. Post-deployment the game yielded a “click-thru” rate of 5.5% to 15%. Carol Rogalski, WildTangent spokeswoman claims that the game successfully drove consumers to ask for quotes. Source: Geek Wire Sun Life Financial of Canada uses its ‘Money UP’ online gamification platform to raise awareness on retirement and investment planning mostly among its young customers. The app provides educational content on the financial dynamics of savings plans, access to videos, interactive flash-based experiences, financial calculators, a retirement planner, and other online learning devices. The app features options to enrol in plans or increase their contribution levels. Post-launch, the app registered the highest ‘take-up from Generation Y’ wherein over a third of players were 21 to 35 years old. Generation X users (ages 36 to 45) comprised a third of the game’s participants. Let me tell you why gamification of insurance has the potential to be more relevant than ever before. Insurtech start-ups even the incumbents are now focusing significantly on the millennials segment. A race is on to tap the “millennials savings” and we are of the opinion that gamification will find traction among millennials. The very nature of gamification is to indulge the user into a rich and immersive experience which enables instant engagement. Furthermore, gamification eliminates human intervention and nullifies any possible false positives. These traits are probably the best possible value proposition when targeting a millennial. Insurers can leverage gamification to augment the role of an agent and provide millennials with self-service facilities, address their core needs and raise awareness about insurance products. Below is a table representing the possible benefits of gamification for each stakeholder across insurance LOBs.  As new-age companies heat up the insurance sector with their niche products coupled with funky marketing collaterals calibrated to target the younger customer base. We foresee gamification to fair well among millennials. Gamification fits aptly across the entire insurance spectrum, beginning from raising brand/ product awareness, customer onboarding, underwriting, claims prevention and cross-sell of other insurance products.