Tag: insurance

customer onboarding

How to Improve Customer Onboarding in the Insurance Industry with AI

August 16, 2024

The ongoing digital insurance transformation has unlocked several fascinating possibilities for insurers in terms of enhancing a wide gamut of customer-focused services and functions. For instance, they can now use AI in insurance to boost customer experiences not just during claims processing, but also at the time of insurance customer onboarding. It is this aspect in particular, that is witnessing major innovation across the sector, with more customers inclined towards companies that enable swifter completion of formalities with zero hassles. Let us take a closer look at how insurance companies can improve customer experiences at the time of onboarding with some help from AI. Insurance companies are using AI to improve customer experience through personalized policy recommendations, faster claims processing, and proactive customer support, while digital onboarding in insurance streamlines the signup process with automated identity verification and real-time risk assessment. How Generative AI is Playing a Role in Insurance Onboarding From automated risk assessment to seamless claims processing, there are varied insurance applications that are steadily undergoing an AI-led transformation. Onboarding, in particular, is seeing a major revolution of sorts, driven specifically by the power of generative AI. Here’s how: It can then be agreed that AI in insurance onboarding makes the whole process faster, more personalised, and smarter than conventional methods. This matters all the more, since traditional onboarding methods may lead to unwarranted delays and issues for both insurers and clients. This is because they mostly revolve around lengthy and intricate paperwork along with complex verification processes and repetitive tasks. AI can completely transform the whole system into a more customer-centric and effective one, while saving time and effort for all parties in the transaction. Insurance Customer Onboarding with AI- Some Areas that Can Be Transformed So, the big question now is how insurance customer onboarding can undergo a transformation, courtesy of AI. Here are a few core pointers that should be examined in this context. Signing Off Insurance customer onboarding can thus be transformed comprehensively with the help of AI. Self-service KYC and easy document uploading, along with automated risk assessment and underwriting have already become realities. At the same time, verifying identities and documents is also becoming faster and more streamlined. What it does eventually is make the whole process faster and more convenient for customers, while adding a personal touch to the same from the outset. FAQs 1. How can AI speed up the insurance customer onboarding process? AI speeds up insurance customer onboarding through automating risk assessment and underwriting and also document verification. It speeds up the whole process by eliminating lengthy paperwork and verification mechanisms. 2. Does AI onboarding with insurance companies compromise my data security? AI onboarding with insurers should not hinder customer data privacy and security. Most insurance companies make use of advanced technologies like encryption to ensure the safety of customer data. 3. What are the advantages of using AI for insurance customer onboarding? Some of the benefits of using AI for onboarding insurance customers include more personalised experiences, faster processing and risk assessment, seamless underwriting and verification, and of course, automated updates throughout the process. 4. Is AI replacing human interaction in insurance onboarding entirely? AI has the potential to replace human interactions to a large extent in the insurance onboarding process. Virtual assistants and Chatbots can be deployed to offer real-time and 24-7 support to customers along with helpful information and updates. Self-service KYC and automated verification and underwriting can free up insurance personnel to focus on more valuable tasks. 5. What to consider when choosing an insurance company with AI-powered onboarding? When selecting an insurance company that offers AI-based onboarding, there are a few things to consider. These include the overall reputation and presence of the insurer, its claim settlement ratio, the overall security measures undertaken to protect customer data, customer reviews and testimonials regarding the onboarding and claims processes, and of course, the overall ease of onboarding.  

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A Deep Dive: The Role of APIs in Revolutionising Insurance

A Deep Dive: The Role of APIs in Revolutionising Insurance

June 28, 2024

The insurance industry is currently in the throes of widespread evolution as we speak, with technology and innovation being the key catalysts at the center of the action. APIs or application programming interfaces are enabling a switch towards a more digitised and well-integrated experiences for customers. They help in bridging the gaps between unique services and applications, helping them collaborate in a better manner. Let us take a closer look at how they play a vital role in completely revolutionising the insurance industry today. A Closer Look at APIs Here’s how APIs are enabling an insurance transformation in multifarious ways. How APIs are Benefiting the Insurance Sector Here are some ways in which proper API management has a positive impact on the insurance sector. How APIs Can Be Deployed Throughout the Insurance Industry Here are some use cases that you should know more about. Why Open APIs Matter Here is a closer look at the importance of open APIs in the insurance industry. Signing Off Open APIs are already being leveraged by leading insurers for unlocking innovation and business growth alike. Allianz, for instance, has created its own platform enabling third-party developers to build new services and products on top of its existing solutions. AXA has also created a similar platform enabling developers to get access to data from its insurance products. They can thus create newer services and products that are in sync with specific customer requirements. APIs are also enabling insurance sector digitisation while simplifying more repetitive and complex tasks for boosting productivity. They can ensure automatic assessment of damages with quick processing, especially via technologies like spatial analytics technology, video data and image labeling, AI, and more. Underwriting models are improved considerably where data is easily retrieved in real-time from the source, enabling that they account for updated information. Insurance companies thus benefit from time savings with regard to the extraction, sorting, and analysis of bigger data sets. They make a compelling case for insurance companies looking to embrace the new wave of digitisation and stimulate growth in a highly competitive global market. FAQs 1. What are APIs, and how do they relate to the insurance industry? APIs are application programming interfaces and they are related intrinsically to the insurance industry, working as translators and bridges between disparate applications. They enable their smooth collaboration and interaction for enabling wide-ranging customer and insurer benefits. 2. How do APIs support innovation and collaboration in insurance? APIs enable higher collaboration and innovation in the insurance sector, where companies can create dedicated API platforms. Open APIs will enable them to collaborate with other developers and entities to build more personalised and efficient products and services, while bringing them swiftly to the market. 3. Are there any challenges associated with API adoption in insurance? Some of the challenges include dealing with legacy systems and the costs involved in the creation of custom APIs. Other challenges include skill development and training of the workforce, along with the integration of new technologies into older systems. 4. What are the benefits and drawbacks of open APIs for insurance companies, fostering innovation vs. potential security risks? The benefits of open APIs are numerous as far as insurance companies are concerned, including wider access to data, creation of more personalised products and services, improved underwriting, and better customer support. The only drawback is that API infrastructure may sometimes be vulnerable to breaches of security, including SQL injection and XSS (cross-site scripting) attacks. Safeguarding valuable customer data and implementing consent mechanisms are also some challenges that insurers have to tackle in this regard. 5. How will the use of APIs change the role of insurance agents, with a potential shift towards a more consultative approach? The use of APIs in the insurance industry will play a crucial role in the digitisation of operations, thereby enabling agents to function in an omnichannel ecosystem, while accessing precise data whenever required, and offering the same in a more user-friendly and understandable format to their prospects. The approach will be more consultative in nature, with agents being able to collaborate seamlessly across platforms and offer more personalised services and support to their customers.

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Busting Myths and Misconceptions

Busting Myths and Misconceptions about ULIPs

April 26, 2024

Have you considered investing in a ULIP? For the still-uninitiated, it means a Unit-Linked Investment Plan. Why is this plan different? It offers a unique mixture of insurance and investments. You can obtain insurance coverage for the duration of the policy while a major chunk of your premium is allocated for investments in market-linked instruments depending on your risk appetite and preferences. While it sounds like a win-win proposition for several investors (and often is), there are several myths associated with ULIPs that should be busted in order to help you take an informed investment decision. Here’s taking a look at some of them in this article. Biggest Myths Regarding ULIPs Here are some of the prevalent myths about ULIPs that you must have heard about at some point of time. This is nothing but a misnomer. A ULIP works in a manner where you have to pay premiums to the insurance company every month, year, or quarter, depending on the policy structure and your preferences. Each time you pay this premium, most of the money is invested in your chosen funds after deducting service charges for life insurance coverage, fund management, and so on. From the 1st of September, 2010, the IRDAI (Insurance Regulatory and Development Authority of India) has capped these charges (excluding those for life insurance coverage) at 2.25% for ULIPs if customers stay with the financial product for 10+ years. There are several plans available these days which enable lower purchase costs for customers. Compare available policies and go for the one which suits your budget. Another misconception that is often tagged to ULIPs is that they are among the riskiest investment bets out there. However, the reality is that they are comparatively safer than many of their equity-linked counterparts. The life insurance coverage in this plan remains fixed. You will get multiple fund options to invest in and can allocate investments as per your risk appetite and goals. You can choose equity, debt, or even balanced (mix of debt and equity) funds as per your preferences. You can switch funds whenever you wish or change your allocation strategy with the assistance of your fund manager. Hence, you have a measure of control over your investment and can switch tack in case of market fluctuations or disruptions. ULIPs do not offer subpar returns as is often wrongfully projected. The returns depend on your chosen asset classes and funds along with market movements. Switching funds strategically and choosing a good mix of funds will help you get optimal returns over the longer haul. At the same time, you also get insurance coverage simultaneously. In the long run, the returns are quite competitive as you will find out. Of course, you should only invest in a ULIP for medium to long-term goals. The lock-in period of these policies is five years, after which you can easily surrender your policy. In case you opt for full withdrawal before policy maturity, then you will not have to pay any exit load/surrender costs. You will get the fund value instead. However, you should look at staying invested for a longer duration in order to reap benefits through the power of compounding. Agreed, ULIPs are linked to equity markets. However, this does not mean that your life coverage will go down with a dip in the market. It is not impacted by any market movements and stays fixed. In case of the policyholder’s unfortunate demise within the tenure of the plan, the policy will pay out either the fund value or life coverage amount (whichever is more) to his/her nominees. This is one of the biggest myths surrounding ULIPs today. Do note that you can always use surplus or additional funds to top-up your current policy. You will get tax benefits just as in the case of regular premiums. You can pay these top-up premiums multiple times as per your preferences throughout the policy period. Of course, accidental coverage may be necessary in many cases. Life insurance plans which have accidental death coverage are helpful in specific scenarios where accidents lead to fatalities or disabilities, necessitating financial support for the family in question. However, it is not true that ULIPs do not offer accidental coverage. Alongside, you can choose add-on covers for your life insurance coverage component to enhance your financial protection against risks. Accidental death benefit riders can be chosen in this case. As can be seen, there are several wrongful perceptions and myths that are often attached to ULIPs, which are otherwise sound investment options for people at various stages of life. With the right strategy and a seasoned fund manager’s guidance, they can turn into game-changing investments to secure your future and meet other objectives seamlessly. FAQs How can I maximize returns on my ULIP investment? You can maximize returns on your ULIP investment by staying invested for the long term. This will help you benefit from the power of compounding. Additionally, choose your investment funds carefully, going by market trends and patterns. You should keep reviewing your portfolio and switching funds to earn higher returns over a certain duration. Are ULIPs only for investment and not suitable for insurance needs? ULIPs are not just for investment purposes, but also take care of your insurance requirements. They offer decent life insurance coverage which helps create a financial safety net for your family in the event of your unfortunate demise within the policy period. Can I withdraw money from my ULIP before the lock-in period? What are the surrender charges? No, you cannot withdraw money from your ULIP prior to the conclusion of the lock-in period of five years. You can choose to surrender your policy before the lock-in period and the insurance company may deduct the discontinuance fee from the amount accumulated. This will be moved to a DP (discontinuance policy) fund and you will get this amount only after the conclusion of the lock-in period. Is it possible to surrender a ULIP before the lock-in period? Yes, you can surrender

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reinsurance

Reinsurance in the Sharing Economy: Protecting the New Business Models

March 20, 2024

The sharing economy is a subject that merits a thorough understanding of its underlying dynamics. Before coming to reinsurance, it is important to put the sharing economy into perspective. It can be called a system or framework where community platforms are leveraged for sharing services or assets by individuals. It has grown exponentially over the last few decades, enabled by growth in digital platforms and higher mobile app usage by customers. The insurance industry has also adapted itself to newer models accordingly. On-demand and flexible products and services enabled through technology like IoT, AI, and big data has driven reinsurance in the shared economy. There are now products which enable risk management commercially without the conventional un-affordability or non-viability for individuals otherwise purchasing full commercial polities. Some of the challenges and opportunities in reinsurance in this paradigm also deserve a closer look. The opportunities are clear- higher access, inclusion, and overall efficiencies. The risks include data protection, privacy regulations, and overall security. Cybersecurity is thus a major trend in the space along with the growing usage of AI and big data. Some other regulatory aspects attached to the space in a sharing economy are concentrated around data privacy too. It matters clearly since there is a marked propensity amongst millennials and younger demographics towards the sharing economy as per reports like the Global Data 2022 UK Insurance Consumer Survey and others. Multiple peer-to-peer platforms are thus offering insurance via integrated models in partnerships with insurance companies. This is enabling insurance companies to get higher access to newer customer segments and markets alike. A Closer Look at Reinsurance Reinsurance refers to insurance that is purchased by the insurance company from other insurance companies for safeguarding itself in case of risks arising from major claims-related scenarios. With this system, some of the company’s own liabilities are passed onto the other insurer. Hence, it is a contact mechanism between a reinsurer and an insurance company. The latter will transfer risk to the former while the reinsurer also assumes the entire/part of the insurance policies issued by the latter. There are various kinds of reinsurance agreements. Treaty reinsurance is a contact type where reinsurers accept all classes of policies from insurance companies including those that have not been underwritten or issued yet. Facultative reinsurance covers individual policies such as reinsurance for the additional insurance on any asset or coverage for various components of multiple policies which are clubbed together. Proportional reinsurance is where the reinsurance entity gets a prorated share of the policy premiums that are sold by the insurance company. It will thus bear a part of the losses as a pre-fixed percentage in case of claims while reimbursing the insurance company for customer acquisition, processing, and underwriting costs. Under non-proportional reinsurance, the reinsurance entity will only have liability in case the loss of the insurance company surpasses a certain amount. This is called the priority/retention limit and is chosen on the basis of a single type of risk or category of the same. How It Actually Pans Out Reinsurance customers pay premiums in return for the promise of the insurance company to pay out future claims as per the coverage provided. Reinsurance companies have risk modelers and managers for contract pricing just in the manner of regular insurance companies. However, the customer base is different in this case and is under a broader jurisdictional net of legal guidelines. Regular insurers can sell and advertise their offerings to the mass market while reinsurers function in the background. They have smaller employee counts and usually build on niche segments with lesser competition. Reinsurance contracts are not regulated in the same manner as regular insurance contracts. This is because both parties in the agreement are perceived to have the same knowledge and expertise in the industry along with equal bargaining abilities as per legal frameworks. Reinsurers are regulated on the basis of the regions where they file incorporation documents and where they conduct business/transact. They usually tackle more complicated insurance risks that regular insurers do not wish to absorb. They mostly deal with insurance companies, but sometimes they may underwrite policies for MNCs, intermediaries in the financial sector, and banks. However, the biggest client base in this case is insurance companies. Some risks may include recession, war, commodity market fluctuations, and so on. Reinsurers usually build a global footing as a result, enabling them to spread their risks throughout bigger zones. To sum it up, there is a need to safeguard business models that arise from the sharing economy concept. Reinsurers and insurance companies can transact and enter into contracts, although they have to be mindful about data privacy and other regulations. Offering stable and unhindered coverage minus disruptions is the need of the hour. FAQs With the evolving regulatory landscape around the sharing economy, how can reinsurers ensure compliance and offer stable coverage? Reinsurers should have standardized and steady coverage mechanisms and frameworks that take into account multiple risk factors for each segment. At the same time, there should be compliance as per region/state rules and restrictions. How can reinsurers develop affordable and accessible microinsurance solutions for individual participants in the sharing economy? Reinsurers can look at more affordable solution buckets for microinsurance to individual sharing economy participants. They can accomplish this by streamlining their risk and coverage categories into particular groups and tailoring the same as per their individual participant/client base. Are traditional insurance policies sufficient for sharing economy platforms, or is specialized coverage required? Traditional policies may often be sufficient for sharing economy platforms if it fits the particular or individual risk category or requirement. However, specialized coverage may be required at a more personalized level and reinsurers should have the technology and resources to come up with the same. Can reinsurance help sharing economy companies expand globally? Reinsurance may help sharing economy entities expand their presence globally. This is because they can attract a larger number of insurers worldwide with varying coverage and risk requirements. At the same time, reinsurance will enable global

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Unveiling the Opportunities for MGAs in India

Unveiling the Opportunities for MGAs in India’s Expanding Insurance Market

February 5, 2024

MGAs (managing general agents) play vital roles in the entire distribution chain of insurance. Taking the ever-expanding insurance market in India into account, it can be said that there are several untapped insurance opportunities that MGAs can successfully harness in the future. Yet, while they are not yet existent in India, they may have a crucial role to play in the future. Knowing more About MGAs MGAs (Managing General Agents) are insurance intermediaries which can get authority from their insurance partners to quote and bind policies that may fit within the agreed-upon parameters of risk of their insurance company relationships. Many MGAs also build differentiators with expertise in niche, nonstandard, or specialty insurance lines, and also through possessing privileged access to particular segments of customers. What are the Opportunities for MGAs Ahead? From diversification of insurance products to further leveraging untapped insurance opportunities and expanding insurance market in India, MGAs have several opportunities to fulfill in the future. The market gap currently results from the fact that where insurers can delegate distribution authority to corporate agents, platforms, and brokers, there are no regulatory provisions for delegating underwriting authority. At the same time, one of the biggest challenges that distribution networks face in the country is lower penetration of coverage in semi-urban and rural zones. Here are some of the ways in which MGAs can fill up the gap: Why MGAs are Needed in India Being an insurance intermediary between the policyholders and insurers, MGAs will automatically bolster customer experiences through taking care of underwriting policies and offering smoother and faster policy administration and claims handling. They can also take care of risk management in turn. India’s massive population always means that there is a huge untapped market for more insurance products. A few large players currently dominate the market and MGAs can help level the playing arena by enabling smaller insurance companies to access the market or expand in several areas without the setting-up and infrastructure-building costs involved. By offering more targeted insurance solutions, MGAs (Managing General Agents) can also enhance overall insurance penetration in the country. They can create insurance solutions tailored to the requirements of particular regions or industries. Just 3.76% of the Indian population had insurance coverage in any form in 2019 and by March 2020, only the top five insurers in the country accounted for a whopping 63.5% in terms of market share. This makes a compelling case for the introduction of MGAs in the market, something that the IRDAI is reportedly considering at the moment. MGAs will not just extend coverage to under-served and rural areas where traditional insurers have limited presence, but also enable partnerships with brokers and local agents for meeting specific community needs in this regard. They can also cater to niche segments like startups, high-net-worth individuals, and small and medium-sized enterprises (SMEs). These segments often require specialization solutions that traditional insurers may not always be in a position to provide. MGAs can also work with insurtech and fintech players to tap their distribution networks while offering their expertise in claims management and underwriting. Here are some other ways in which MGAs can help: Hence, as can be seen, there is a strong case for the introduction of MGAs in the Indian market. They will not only expand the reach and distribution of coverage throughout the country, but also bring many other benefits for insurance companies in turn. FAQs What are the key opportunities for MGAs in India’s expanding insurance market? There are several opportunities for MGAs in India’s expanding insurance market. These include expanding the reach of bigger insurance firms in several regions at lower costs, offering expertise for specific lines of business, taking on underwriting authority, claims management, and policy handling, offering personalized insurance solutions to customers, and more. What are some examples of successful MGAs in India? There are no examples to cite currently for successful MGAs in India. The country has not officially introduced MGAs into the insurance industry. However, the IRDAI is reportedly considering the feasibility of allowing MGAs to operate within the sector and a decision on this aspect could be announced in the future.

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The Impact of MGAs on Risk Management and Underwriting Practices in India

The Impact of MGAs on Risk Management and Underwriting Practices in India

January 16, 2024

Managing general agents (MGAs) do not exist in India as of today, although they may be allowed in the future (the IRDAI is reportedly considering enabling these entities in the insurance industry). However, there is no denying the impact of MGAs on risk assessment and management in the Indian insurance sector along with potential opportunities for MGAs’ underwriting capabilities. Let us take a closer look at how these entities can streamline these two aspects of the insurance sector. Underwriting and Risk Management in Indian Insurance- How MGAs Stand Out The impact of MGAs on risk assessment and management along with underwriting can be gauged through the following aspects. MGAs are also continually updating their knowledge base due to a fast-changing world and evolving risks. From climate change and cyber-security to other emerging risks, MGAs are adaptable and offer specialist underwriting and risk evaluation abilities for insurance carriers or reinsurers. MGA’s underwriting capabilities come to the fore, focusing on specialist lines and niche markets, enabling more accurate policy pricing and a better balance between rewards and risks. The surplus from profitable underwriting can be reinvested into technological expansion, research, and expanding markets. MGAs can indirectly spur growth throughout the sector by ensuring higher profitability. They are also skilled at making sure that risks are balanced better throughout the entire spectrum and effectively enable the management of aggregation limits. They ensure that any single catastrophe or disaster does not lead to a spiralling or domino impact, thereby protecting the financial health of reinsurers and insurance carriers alike. Real-time data is also leveraged by MGAs for gaining more insights and forecasting trends along with making informed decisions. They also thrive on analysing market trends and data while being positioned ideally to build policies that offer maximum and specialised coverage at comparatively affordable rates. Hence, through the combination of more profitable underwriting and risk management with an emphasis on specialist knowledge and dynamic market responses, MGAs are perfectly placed to deliver greater value to the Indian insurance industry in the future. FAQs What impact have MGAs had on risk management practices in the Indian insurance industry?  MGAs have had a major impact on risk management practices in the Indian insurance industry. Some of their plus points include specialist knowledge and focus on business lines which help price policies more competitively and accurately while evaluating risks better from a micro standpoint. At the same time, MGAs are also leveraging technology for risk estimation and management. How have MGAs influenced underwriting practices in the Indian insurance industry? MGAs have greatly influenced underwriting practices throughout the Indian insurance sector, making them streamlined and more technology-driven with accurate risk estimation and management. They have specialist knowledge of particular business lines and bring this into play while underwriting policies and enabling quicker turnarounds. 

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Data Analytics in Health Insurance for Better Risk Management

2024 Trends: Data Analytics in Health Insurance for Better Risk Management

January 8, 2024

The health insurance industry has witnessed a rapid evolution in terms of digitisation, which has also swiftly transformed several other sectors worldwide. One of the biggest contemporary trends in health insurance (and poised to last for the foreseeable future) is the harnessing of data analytics to ensure superlative risk management among other benefits. Pharmacy managers, insurance companies, healthcare providers, and other industry stakeholders are already leveraging analytics to tackle issues of fast-growing healthcare costs. Insurance companies are already using them to identify high-risk patients and operate accordingly. Why Data Analytics is Indispensable From an operational standpoint, data analytics is indispensable for health insurance companies. They keep generating huge data volumes internally through sales and engagement but also get sizable chunks from varied external sources. When this data spreads out through multiple systems, it becomes an uphill task for insurers to effectively use and track the same. This is why analytics-based solutions that can fuse and consolidate data from multiple touch points and sources have gained relevance in recent times. A centralised data gathering system with consistent analytics and actionable insights is thus one of the key trends in health insurance currently. How Data Analytics Enables Better Risk Management Data analytics is undoubtedly contributing towards enabling insurers to manage their risks better. Here are some aspects that should be highlighted in this regard. These benefits have gained even more traction in recent years if one considers how insurers lose a whopping $40 billion per annum on account of fraudulent claims as per Gartner reports. Many insurance companies also estimate 10-20% of claims to be fraudulent while identifying less than 20% of the same. Suspicious and fraudulent behaviour and patterns can be identified with data analytics, with insurers creating diverse models to enable swift detection based on historical data and activities. For instance, analytics has reportedly helped the Czech Republic’s Allianz Insurance to save a whopping US$4.5 million annually by lowering fraudulent claims paid by it. This is just one of the instances that testify to the need for insurance companies to rapidly adopt data analytics into their operational frameworks. Analytics can be used to conduct risk evaluation in real-time which will help organisations respond swiftly in volatile scenarios. For example, in the case of auto insurance, an accurate assessment of risks posed by specific drivers will help insurers create more competitive premiums. Cars connected to the internet will help them gather large volumes of data accordingly. Insurance firms can now predict the chances of drivers being involved in accidents by analysing driving habits and behavioural data. Some other advantages of data analytics include easier customer lifetime value (CLV) prediction and prospective claim forecasting. FAQs How can data analytics contribute to more precise risk assessment in the health insurance industry? Data analytics can enable more accurate risk assessments in the health insurance sector. It can help identify fraudulent behavioural patterns and flag the same for review before the actual payout. What impact do 2024 trends in health insurance data analytics have on customer experiences and personalised offerings? 2024 trends in health insurance data analytics will have a positive impact on customer experiences. Insurers will be able to personalise their offerings for customers based on their behavioural data and also offer custom premiums with incentives for recommended and healthier actions.

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Enhancing Underwriting Precision: The Role of Data Analytics in Insurance Broker Decision-making

Enhancing Underwriting Precision: The Role of Data Analytics in Insurance Broker Decision-making

December 28, 2023

Data analytics in insurance has been a veritable game-changer for the industry in recent times. It has become a major solution for several issues while enabling a more personalised experience for customers. Insurance brokers are steadily embracing data-driven insurance intending to bolster their decision-making process. Let us look at some of the biggest advantages of deploying analytics in the insurance sector. Benefits of Data Analytics in Insurance for Brokers Insurance broker decision-making can improve considerably with the deployment of data analytics. Here are some of the biggest advantages worth noting in this regard. These are some of the core benefits that can boost insurance broker decision-making greatly. Analytics can transform the operational side of the business while freeing up brokers to focus on strategising for future growth without worrying about the operational and administrative aspects of the sector. FAQs What is the role of data analytics in enhancing underwriting precision for insurance brokers? Data analytics can greatly enhance underwriting in terms of accuracy for insurance brokers. It can estimate risks better and predict premiums more accurately for customers who are more prone to the same. In what ways can insurance brokers leverage data analytics to tailor insurance solutions for individual clients? Insurance brokers can seamlessly leverage data analytics for tailoring insurance solutions for their clients.  Data-driven insights will enable better customer understanding and an idea of preferences. This will help insurance brokers come up with genuine recommendations and more personalised products/services that will help customers meet their needs better. What types of data sources are most valuable for insurance brokers seeking to enhance underwriting precision through analytics? Insurance brokers who are looking to enhance their underwriting processes through analytics rely on varied data sources. Some of these sources include social media platforms, demographics, lifestyle, age, medical data, and more.

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Strategies for Success: How MGAs Can Thrive in the Indian Insurance Industry

Strategies for Success: How MGAs Can Thrive in the Indian Insurance Industry

December 26, 2023

MGAs (Managing General Agents) are currently not existent in the Indian insurance industry. However, there is a genuine need for the introduction of more MGAs into the industry, considering the country’s overwhelming need to scale up insurance penetration (just 3.76% of the population had insurance coverage in any form in 2019). MGAs will help the industry considerably by identifying niche markets and underserved segments and offering specialist solutions for the same on behalf of insurers. It will be possible to offer customised and more value-added micro insurance in India which is not possible for bigger insurance players across several regions. Insurance MGAs can help in the extension of coverage throughout several under-served and rural areas, where traditional firms have limited presence due to the lack of resources and infrastructure. MGAs can also partner with local brokers and agents to offer more tailored insurance products that meet community-specific requirements with aplomb. As mentioned, they can also cater to niche and often underserved (by bigger insurance carriers) segments like startups, HNIs (high-net-worth individuals), and SMEs (small and medium enterprises). Insurance MGAs can also enter into collaborations with insurtech players that are already leveraging technology to disrupt the industry. Through these partnerships, these startups can tap their distribution networks and expertise in claims management and underwriting. MGAs Competitive Landscape and the Need for Proper Strategies MGAs (Managing General Agents) do not exist in the Indian market today. However, they are steadily becoming more relevant worldwide and also throughout Asia. The IRDAI is already considering the feasibility of allowing MGAs in a bid to increase insurance penetration throughout the country and it may become a reality soon. The traditional argument in favour of MGAs is usually based on the fact that global and large insurance carriers have become behemoths with commoditised and mass-market products and services, which do not focus on individual customer requirements. MGAs, in contrast, are smaller operations which can easily foray into niche areas and enable bespoke and more affordable insurance solutions tailored for their customers. The sector may develop exponentially across Asia over the next 2-3 years. Hong Kong is anticipated to stay a more dynamic coverholder segment and more MGAs should come up in Singapore. More regulators in the region will steadily amend their frameworks and unveil pilots to allow MGAs into their insurance industries. The usage of MGAs is fast becoming a common strategy for distribution channels in insurance. Along with potentially enabling microinsurance in India for specific communities, people, and regions, MGAs can also react more swiftly to new market changes and enable more efficient risk management on behalf of bigger insurance carriers. Hence, considering the competitive nature of the market globally and with things heating up in Asia, MGAs will have to fine-tune their strategies for success in a more intelligent manner. For instance, as far as the Indian market is concerned, here are some strategies that they can consider. Strategies Worth Considering for MGAs in India These are some strategies that MGAs (Managing General Agents) can harness for more success in the Indian insurance industry. As can be seen, the time is ripe for the introduction of MGAs (Managing General Agents) in the Indian insurance industry. MGAs that leverage technology can help cater to niche segments, offer more personalised or micro-level insurance solutions, boost underwriting and claims management, and combine with insurtech or fintech players to revolutionise the industry. The sector has huge potential for growth in India although a lot depends on official regulations being released for the same shortly. FAQs What are the key opportunities for MGAs in India’s expanding insurance market? MGAs can tap several opportunities like the expansion of insurance coverage on behalf of larger carriers in under/un-served/rural markets, offering more niche and personalised insurance solutions with specialist services, making claims processing and management more seamless along with enhancing underwriting for insurance companies, and also offering insurance solutions for sectors usually not covered by traditional insurance firms. What are some examples of successful MGAs in India? There are no examples of successful MGAs in the country as of yet since it has yet to officially allow these entities in the insurance industry. However, the IRDAI is reportedly deliberating on the possibility of allowing them in the future. What are the key trends that MGAs should watch out for in the Indian insurance market? Some of the major trends that MGAs should watch out for in the Indian market include the focus on more specialist and micro insurance solutions, increasing customer demand for personalised insurance products and services, and of course, the increasing shift towards digitisation.

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2024 Trends: Data Analytics in Health Insurance for Better Risk Management

2025 Trends: Data Analytics in Health Insurance for Better Risk Management

December 20, 2023

The health insurance industry has witnessed a rapid evolution in terms of digitization, which has also swiftly transformed several other sectors worldwide. One of the biggest contemporary trends in health insurance (and poised to last for the foreseeable future) is the harnessing of data analytics to ensure superlative risk management, among other benefits. “Health insurance data analysis plays a key role in improving decision-making and driving effective health insurance analytics.”Predictive analytics in health insurance enables insurers to derive actionable insights from data, helping them design more profitable and customer-focused insurance products. Pharmacy managers, insurance companies, healthcare providers, and other industry stakeholders are already leveraging analytics to tackle issues of fast-growing healthcare costs. Insurance companies are already using them to identify high-risk patients and operate accordingly.  Why Data Analytics is Indispensable From an operational standpoint, data analytics is indispensable for health insurance companies. They keep generating huge data volumes internally through sales and engagement but also get sizable chunks from varied external sources. When this data spreads out through multiple systems, it becomes an uphill task for insurers to effectively use and track the same.  This is why analytics-based solutions that can fuse and consolidate data from multiple touch points and sources have gained relevance in recent times. A centralised data gathering system with consistent analytics and actionable insights is thus one of the key trends in health insurance currently.  How Data Analytics Enables Better Risk Management Data analytics is undoubtedly contributing towards enabling insurers to manage their risks better. Here are some aspects that should be highlighted in this regard.  These benefits have gained even more traction in recent years if one considers how insurers lose a whopping $40 billion per annum on account of fraudulent claims as per Gartner reports. Many insurance companies also estimate 10-20% of claims to be fraudulent while identifying less than 20% of the same.  Suspicious and fraudulent behaviour and patterns can be identified with data analytics, with insurers creating diverse models to enable swift detection based on historical data and activities. For instance, analytics has reportedly helped the Czech Republic’s Allianz Insurance to save a whopping US$4.5 million annually by lowering fraudulent claims paid by it. This is just one of the instances that testify to the need for insurance companies to rapidly adopt data analytics into their operational frameworks.  Analytics can be used to conduct risk evaluation in real-time which will help organisations respond swiftly in volatile scenarios. For example, in the case of auto insurance, an accurate assessment of risks posed by specific drivers will help insurers create more competitive premiums. Cars connected to the internet will help them gather large volumes of data accordingly. Insurance firms can now predict the chances of drivers being involved in accidents by analysing driving habits and behavioural data. Some other advantages of data analytics include easier customer lifetime value (CLV) prediction and prospective claim forecasting.  FAQs How can data analytics contribute to more precise risk assessment in the health insurance industry?  Data analytics can enable more accurate risk assessments in the health insurance sector. It can help identify fraudulent behavioural patterns and flag the same for review before the actual payout.  What impact do 2024 trends in health insurance data analytics have on customer experiences and personalised offerings? 2024 trends in health insurance data analytics will have a positive impact on customer experiences. Insurers will be able to personalise their offerings for customers based on their behavioural data and also offer custom premiums with incentives for recommended and healthier actions. 

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