Roopam Asthana, CEO & whole-time director at Liberty General Insurance unravells different facets of innovation in the insurance sector. Excerpts:
Manoj Agrawal: What do you see as the areas where the maximum innovation is happening? Could you give some examples?
Roopam Asthana: Innovation is key for development of the insurance business in India. Insurance business is usually seen as a very old and fuddy-duddy business. What innovation is doing is changing the way the consumers look at insurance, and more importantly, changing the way our own employees look at the insurance business. Usually we are so enamored by the technology-led consumer-facing innovation that we tend to overlook the inward-looking innovation, which a company really works on to improve the overall performance of the company, and eventually it leads to consumer delight.
What we are trying to do is actually make things easier for the customer – and the customer could be our own employee or an intermediary who is selling products for us or is the ultimate customer. Making life easy is an important motto for us and this is really where we are trying to apply innovation. One area where we believe innovation will actually make a big difference is the claims side. We’ve heard a lot about product innovation on the selling side, but I think claims is very important. This is really where insurance starts to pay back to the consumer and the consumer gets value out of the insurance.
So, what are some of the pain points that customers have regarding claims?
Motor insurance is the largest part of the insurance business in India today. And one of the key areas where customers feel pain is in their interaction with surveyors, which is a long-drawn process with multiple handoffs with lot of angst and heartburn across the entire chain, taking 2-3 days. If this process is shorter and quicker and made easier for the customer, that is real innovation for us. We’re trying to develop a solution using video and artificial intelligence for managing claims. We today have the ability for the customer to actually send us a video or a photograph of the damaged vehicle and we can process it in minutes rather than days using the technology we have developed.
I think this is really enormous because we are now looking beyond marginal improvements. Another area of customer experience is robotic process automation, where standard responses can actually be provided by bots to the standard questions from customers who don’t really have to wait a for a customer service officer to come on the line. Also, the robot is available 24x7x365.
Apart from these benefits from a customer point of view, from the company point of view, it improves productivity, costs less and these benefits then get passed on to the consumer ultimately in the form of better price. We’ve started robotic automation on our website and now we are working on voice bots. Back office is an interesting part for us and we are looking at more and more opportunities to remove paper and to increase the speed of processes.
Can you give examples of areas where innovation still hasn’t taken much root, where there is more uncertainty or more human judgment?
Clearly an area where we believe that innovation can start to make a big difference, both internally to the company and externally to the consumer, is in the area of underwriting. What happens is that when you underwrite an insurance proposal, you are actually underwriting the asset. By simple logic, a bad car diver should be charged more premium than a good car driver. But that isn’t happening today because we don’t have information about the driving history. If we are able to seek some basic information from our consumers, we can use that and learn from it by correlating with claims, and then price accordingly. With more information, we can, through artificial intelligence and machine learning, actually teach the machine to underwrite the customer. That would make life easy for the consumer as he/she could talk to the machine and get a customized proposal. From the company’s point of view, it provides standard response to the set of criteria that have been input. Thus, it adds value on both sides, and it actually promotes good behaviour.
Today, irrespective of how you and I drive, our insurance premium is the same. However, tomorrow if I know that because of the way I drive my insurance premiums could go up, it could probably lead me to drive better. This is the benefit to society in terms of fewer accidents on the road and overall better safety.
You talked about minimizing human interface in the processes. Are there areas where there is a need to actually have more human intervention?
I personally believe that customer interface – face-to-face and voice-to-voice – will continue and remain. What we need to do is to take this out from the very common situation and accentuate in the more complex situations. Where there is a very simple job to be done, the customer also doesn’t want a long conversation. They want the job done quickly and efficiently. However, in a more complex situation, such as a very bad accident, obviously you want somebody to take a little more time on your case and make sure that the assessment is done correctly and fairly. This is what automation and innovation should be able to do, to lead to better customer experience.
How satisfactory is the pace of innovation in the insurance industry in India today?
As folks who are determined to increase the penetration of insurance in India, I think there is scope for lot more innovation. I think all components of the ecosystem – intermediaries, regulators, TPAs – have to work together. I think we need a lot more data because data is the future goal. The more data we have, the better we will be able to work. One very simple regulatory change that I think is very essential is for all customers who buy any form of general insurance products today is for KYC to be made mandatory. This will help insurance companies get a lot more information about their consumers and therefore will increase the pace of innovation by being able to direct the right kind of products to the right kind of consumers at the right price.
Also, as an industry, we need to put together an insurance claims repository, similar to credit repository that exists today. The emergence of credit bureaus has changed consumer lending, and I believe that a claims repository will bring a revolutionary difference to the quality of insurance products that are available and their prices.
Further, I think insurance needs to be ingrained in the various life cycles that a consumer goes through. For example, health insurance on its own may not excite people. But when you put it together as a package with diagnostics and doctor appointments and discounts on pharmacies, that becomes a whole ecosystem that looks a lot more attractive. This of course requires a bit of regulatory change because today the insurance companies are not permitted to sell anything else the other than insurance. Another example, if I am able to sell to you an IOT product which can detect burglary or fire and I package that with my home insurance product, it becomes a lot more attractive to you. All of this requires some changes in regulation. The Insurance Information Bureau, which has been promoted by the IRDAI, is today collating a lot of information. I think if that information is cleaned and put in a better fashion, it can actually be monetized and used commercially by the industry for the betterment of everybody. This is one area where payback can happen very quickly.
How does India compare with other BRICS countries in terms of growth, penetration and innovation in insurance?
In terms of the growth of digital insurance industry, India is today the fastest growing. However, over the last one year, the growth has actually come down considerably, from 12-14% per annum to almost sub 10% growth at this point in time, because of the slowdown in the economy. Over the last 4-5 years, India along with China would be one of the fastest-growing general insurance markets. We expect that over the next 4-5 years, this business will continue to grow at 12-14% year-on-year.
The reason why we are so buoyant and confident of this growth is because of the under penetration. Even in the top 20% by income, the penetration of health insurance is only 70%, and it falls drastically as you go down. Among the bottom 20%, the insurance penetration is higher because of various government promoted schemes. Among vehicles, not more than 20-25% of all 2-wheelers in the country carry any form of insurance – that is the sad state of penetration. When you look at out-of-pocket expenses, it is today the highest among all countries because we don’t have a social security system. When our country is hit by natural catastrophes like floods or landslides or tsunamis, most of the damage happens to properties which are not insured. The uninsured losses are very high as compared to the more developed nations where a lot of those assets are covered by insurance.
When you look at commercial insurance, generally you would expect that a factory owner would buy proper insurance, but actually the amount of under insurance there is quite amazing. The business owners insure only to satisfy their bankers because of the loans. There is tremendous amount of under insurance and that gives us the kind of confidence that there is going to be tremendous growth.
