Insurance Industry Trends - 2023

India has seen a digital transformation in recent years and is currently riding strong on the digital wave. Every sector is enhancing with this technology wave, from automobiles to finance to entertainment to Insurance. In today’s digital transformation, the insurance industry has witnessed a rapid change in the ways of doing business and customer service.?

With smartphones becoming a compulsory accessory, customers can connect with digital brokers and can also access unlimited information to make the right buying decisions. There is much more transparency and convenience for the customers to purchase a relevant insurance plan.?

In 2023, the insurance sector is expected to witness many more technological advancements that will transform the industry in the coming years. Some of the major ones are as follows:

1. AI advancements?

Artificial Intelligence (AI) automation remains constant and essential for innovation in the sector. Other than AI, data analysis, digital policy processing capabilities, improved customer redressal, and easy claim process will fuel the industry to enhance its services and offerings. Insurance companies are partnering with Insurtechs to create an AI-based business model. This will help streamline processes, provide unmatched customer experiences with better data security, offer competitive prices and create innovative products.

2. Flexibility for consumers

Flexibility will be the key to a cognitive customer experience design in 2023 in curating the future business scope of Insurance. Today, customers expect more choices from insurance providers. They want to pick and choose and curate their insurance plans. This customisation is possible with well-curated plans by Insurtechs. This means most insurance companies are creating modular products that offer relevant product offerings to the end consumer. Other than this, flexibility will help insurance providers to accommodate the ever-evolving customer demands, adapt to unforeseen circumstances and scale business quickly. This flexibility will come if the insurance providers ride upon digital transformation and outsourcing.

3. Embedded Insurance

Embedded Insurance means bundling up products and value-added services in real-time when a consumer purchases at the point of sale. Not just customers, embedded Insurance also opens new horizons for insurers to access untapped markets. These products are more personalised and complement the main product’s attributes well. It also provides more security and satisfaction to customers. This also lowers customer acquisition costs for insurance providers and helps them expand their product portfolio.

4. Bite-size Insurance

This type of Insurance covers specific needs for a particular time period only. Bite-size policies are cheaper and can be easily bought online, even on a smartphone, as these don’t require submitting documents or tests. These are also known as sachet insurance or small-ticket Insurance. Not just for health or motor insurance, these can also be taken to secure a smartphone or any electronic device, protect from online fraud, dengue insurance, cab-ride Insurance and others. These are typically non-comprehensive insurance policies.?

5. Data-driven

Insurance companies must understand the importance of big data and master data analytics for long-term profits. They need to understand customer preferences and harness the power of analytics. By understanding big data, insurance companies can collect and properly analyse customer data. It also enables faster claims and reduces fraud risk while enhancing the customer experience. They can successfully extract relevant insights and convert them into new business opportunities. Insurers can make an all-inclusive data strategy with better products and newer segments, reducing underwriting risks and fraud control.

The digital future ahead

As insurers are digitalising their processes and technologies, the sector will speed up and help increase insurance penetration in India. Insurance companies are also partnering with Insurtechs to modernise their operations. This will help in automating policy processing and purchase. Customers will be able to make real-time decisions, simplifying claims processes and significantly reducing business operational risks and expenses.