By Rakesh Kumar
According to a PGA Labs analysis, investment in the Indian insurance technology sector has increased at a CAGR of 34%. Overtaking the combined financing amounts of 2019 (380 million dollars) and 2020 (290 million dollars), Indian insurance companies raised a total of 800 million dollars in equity funding in 2021.
Investors now find the insurance technology sector to be more appealing due to technological advancements and governmental regulations. On-demand insurance and artificial intelligence are being applied, and the business is being digitised.
Is on-demand insurance really so popular?
Customers are now able to buy insurance directly from their smart devices, thanks to the advancements in technology and the convenience offered by on-demand insurance. This is a significant departure from the past when everyone had to rely on traditional methods, which typically involved dealing with agents or brokers in their local areas.
Customers can insure their possessions while they are in use and at danger, such as when they are driving a car or going to an event, thanks to this flexibility. Due to the radical changes it has made to the way people buy for insurance, on-demand insurance has grown in popularity.
Integration of AI and InsurTech
Artificial intelligence is already being used in a variety of areas of our daily life, including homes, cars, and enterprises. The COVID-19 pandemic’s disruption forced organisations to quickly adopt remote work, improve digital capabilities for service delivery, and modernise online channels, which expedited the introduction of AI.
Although significant AI investments may not have been made during the pandemic, organisations will be better positioned to integrate AI into their operations if they place more emphasis on digital technology and are more adaptable to change. Significant changes in the insurance value chain are shown by a thorough analysis of the possibilities of the insurance sector in 2030.
How much digitization has the insurance industry adopted so far?
Particularly in India, which has over 600 million smartphone users, digital adoption is increasing quickly. The systemic changes brought on by the pandemic have further pushed the movement of the insurance business towards digitalization. The non-life insurance sector saw a significant increase of 24.15% over the same period last year as a result of this digitization effort.
The industry is actively addressing its top three problems: a lack of knowledge, a lack of accessibility, and a lack of cost. Through numerous industrial advances and advancements, these difficulties are being overcome. It’s critical to remove barriers relating to pricing and awareness in order to close the access gap.
Government involvement in the industry to fight fraudulent apps
A number of bogus apps have been discovered to have connections to foreign organisations, and they are currently being looked into for potential involvement in money-laundering schemes. In developing industries like digital lending, innovation is crucial, as firms frequently launch new goods and services. To protect the interests of consumers, however, government action is required.
The long-awaited rules for digital lending, which have successfully removed regulatory barriers in the sector, were been made public by the RBI. Despite the possibility that these restrictions could raise credit prices, they are anticipated to boost consumer confidence, encourage openness, and eventually guarantee client protection inside the system.
(The author is Rakesh Kumar, CMD, Square Insurance, and the views expressed in this article are his own)
