THANK YOU FOR SUBSCRIBING
By Mohan Shetty, AVP & Head - IT Infra & Operations, Birla Sun Life Insurance
The digital trend has disrupted almost every sector, including Insurance. Digital-driven changes are taking place across value chain of insurance. As insurers search for ways to grow profitably, they have a unique opportunity to embrace and benefit from the digital wave. The impact of digital innovation will drive new regulation, placing additional pressure on insurance organizations to efficiently meet these regulatory requirements.
The internet’s influence on purchase decisions is significantly higher. Online term life plans and travel insurance have already picked up substantially in the last few years. Though better pricing is a key reason for buying online, convenience and increased transparency are also the critical factors. The impact of digital will be felt well beyond the online sales. It is estimated that, by 2020, three in every four insurance policies would be influenced by digital channels during either the pre-purchase stage, purchase or renewal stages.
Trends that influence digital adaption:
These disruptive themes are challenging the traditional insurance business model:
1. Physical footprint much less relevant today
Retail success no longer depends exclusively on an established network of brick and mortar stores. The modern consumer values convenience and value for money above everything else. Success on the digital platform can be attributed to a well thought out strategy and a business model specific to the medium.>p "Success on the digital platform can be attributed to a well thought out strategy and a business model specific to the medium."2. Big Data and analytics break entry barriers
The relatively lower cost of leveraging digital technology compared to physical presence, combined with customer acceptance of new products and brands, is breaking down the barriers to entry across industries. Big data is now a competitive advantage.3. New platforms making company interactions more ‘social’
Insurers are using both mobile and social media to respond to and engage with customers in unique ways. These platforms not only improve sales but also increase customer engagement and improve operational efficiency.
4. Mobile Internet driving customer engagement
A large number of insurers have created mobile applications to improve customer services and/ or increase sales.
The IT in the insurance industry is ramping up to be ready for the digital revolution: