We are seeing that the insurance industry in India is constantly growing parallel with the general economic upswing making India one of the promising countries in the insurance and finance industry.
But we also see that there is still a large untouched potential in this ecosystem - that is why we are happy to shed a little more light on this exciting insurance industry.
Came from Mr. Kamesh Goyal, Founder of Digit Insurance - the excitement during the journey is like with the Avengers' fans assembling the great heroes and sheroes of innovations and digital transformations for the great infinity war to beat the Thanos of complexity and difficulties - not to save half of the population but the full interest of the insurance customers.
How would you explain to a 10-year-old about the current trends and developments in the insurance industry of India? What is not known as it should?
When we asked Kamesh this question, he chuckled as they call themselves, ‘Insurance that is understood by 15-year-olds’. All their policy summaries and claim processes are actually tested by 15-year-old kids for simplicity, a novel way to make sure that when they say they have simplified, they really mean it. Watch the video: https://www.youtube.com/watch?v=fW7XWMJp65I
Coming to the trends & developments in the industry:
‘The excitement is kind of like how it is for Avengers’ fans i.e. bye-bye to old ways and looking forward to the new-age heroes & sheroes. In the case of insurance, the new plot is set in a time when technology is transforming a traditional industry and saving people from tedious & complicated products & processes.
Like each Avenger has a superpower, digitization is that superpower for insurtech, innovating the way processes are designed. For example, Digit Insurance launched a completely smartphone-enabled self-inspection process for claims, which has brought down the inspection time from 7 days to 7 minutes.
Also, like you saw different heroes, sheroes coming together for Infinity Wars, for the big fight. To beat complexity, which is a big Thanos to kill, different companies are coming together to give the end consumer a seamless experience. For example, when we partnered with e-commerce players like Xiaomi, Airtel Payments, Cleartrip, Kishtt, and Policybazaar to give Point-of-Sale (POS) insurance to customers, we did so through customized APIs and made sure that for the customer buying insurance is a breeze.
And as a macro environment, insurance is the need of the hour because of global climate changes that are causing more natural calamities like floods, earthquakes, bush fires, etc… Even accidents are on the rise due to factors like distracted driving in addition to reckless one. Much like the Avengers are needed when something goes wrong with the world.
Also, even a 10-year old is aware of how smartphones have become almost the fifth limb for humans. And just like these smartphones have transformed the retail industry, they are transforming insurance too. People can now choose from a host of insurance products available, right from protecting their gadgets to cycles to homes, all online through their smartphones.’
How digital transformations and innovations are disrupting India's insurance ecosystems? What are the learnings decision-makers should take?
Digitization is about being able to improve efficiency i.e. being able to deliver more with fewer resources and effectiveness too by enabling customization and reducing leakage.
Firstly, being on cloud enables companies to scale up quickly. Esp. new companies, the volumes can change quickly, and cloud allows being ready for the increase in demand immediately instead of waiting for months for the infrastructure or hardware. Being on cloud also helps in customization of products. For example, with the availability of health data in cloud, relevant products can be given to people based on their health condition like a disability or any other pre-existing condition.
Secondly, as mentioned above, customized API integrations enable a smooth interface for end-consumers. And when there a need to make endorsements or changes to the policies from the customer’s end, cloud enables a unified experience, avoiding any double data entry because of the seamless data transfer.
Thirdly, there are a lot of repetitive tasks in process heavy industries like ours which delays Turn Around Times, especially during claims. Therefore, when we also set out our technology team, our long-term approach was to keep operations effective by moving our energies towards automation through Robotics, Machine Learning, and Artificial Intelligence. This efficiency in our processes and approach along with our strategy to have Outsourced Employees in addition to Full-time ones, has also led to us having one of the highest Premium/ Employee in the industry.
What Indian insurance providers should do to become more relevant to the daily lives of customers instead of annual meetings?
To be relevant in any person’s life, you must relieve them of their pain points.
From a product pov, our focus is to provide ‘real benefits’ to people which make sense to their life-stages instead of standard ones. From a process pov, we focus on a hassle-free, seamless process that can be automated as much as possible. From a documentation pov, our endeavor is to make insurance so simple that it can even be understood by kids.
Also, as insurance providers, we must not shy away from, ‘Collaborating with the customer’. Not just for products, seek collaboration to innovate in other areas as well. For example, to handle the problem of customers not reading the long policy documents, we started a 2 pager summary document for each product, that gives all important inclusions & exclusions in the policy as an easy-breezy read for the customer. This idea was actually given to us on Linkedin, by a competition employee 😊
And the relationship with the customer must be continuously nurtured to stay relevant. For instance, to engage and educate these happy customers, we run an ‘Engagement Program’. The program has an average engagement rate of 20%, as against the industry average of 5-7%. The objective of the program is to help people use their policy features better. Also, we feel that people are mostly kept it in the dark when it comes to ‘What’s not covered in their policies’, so we use this program to educate them about the exclusions as well.
For example, in India, there is a lack of awareness around how to use ‘Roadside Assistance’. People are not aware that it covers common problems like a flat tire, empty fuel tank, loss of key, etc… Also, people are under the misconception that using Roadside Assistance will be counted as a claim and will lead to a loss of No Claim Bonus (NCB). We tried to spread awareness on this and saw that the usage of Roadside Assistance, which was just 1-2% of the customers who had the cover in their policy, almost double after our Engagement Program.
And then, to keep the fire burning in the relation, we must keep looking at ways to ‘Surprise the customer’. For example, we are about to launch a ‘Simple Insurance Dictionary’ for our customers in the next one month, the concept of which is to have a mini-search engine for people to search insurance definitions, explained in simple language, with analogies that even kids could understand. This dictionary is probably one of the first of its kind and has been co-created with customers and industry veterans through our social media channels. We received around 200+ definitions from them, which will be available on this search engine.
This continuous engagement leads to more loyal customers and the brand being organically recalled. Which is why we have 60,000+ monthly visitors who come from non-paid sources, which is almost $82,000 worth monthly consumer traffic.
We're really curious about GoDigit, can you share some notable details about your digital products and services?
At Digit, we live and breathe our mission to ‘Make Insurance, Simple’. And we have two company values we imbibe to make this happen, ‘Questioning the status quo’ & ‘Being transparent’.
#1 We believe in ‘Co-creation of relevant products’
We take inputs from our partner insurance distributors as they have a wealth of information & insight into what the end-consumer wants. For example, with our health product, we complete our retail portfolio, it should be live on our website by this month’s end. This product was created after seeking out suggestions from employees, our existing customer base and partners. We reimagined the benefits given by health insurance providers basis the different life stages of people, getting out of the standard product approach.
#2 We believe ‘Being transparent’, is a refreshing and effective strategy
We follow this in our communication, processes as well as we release a Public Report called the ‘Transparency Report’ every business quarter that puts across our Turn Around Times across products, our Claim Settlement Numbers, Market Share etc… for prospective customers, customer, partners to read. This is something that not many players do. But for us, this is an oath of transparency we’ve taken, pushing us each day to better our processes and consumer journeys. We have already released two reports and are on our way to version 3.0.
#3 We focus on ‘Improving consumer journeys’
And a big part of it is to ‘Simplify Claims’. Our processes are conceptualized keeping in mind genuine customers and not fraudulent ones. Basically, we have made the process completely Digital, Paperless, and Smartphone-enabled. Right from Audio Claims to Self-inspection apps, the main purpose is to simplify and fasten claims. Here again, we are always in an improvement mode. Our analytics works at a ‘Granular level’, apart from overall Turn Around Times (TAT), we measure TAT at a department level as well. This measurement is available in our Transparency Reports. Also, to balance out smooth processes and business, with this deep analysis, we are able to reduce the claim payouts and improve fraud detection.
#4 Happy customers are our Real Advertising
As a result of all of these initiatives, we are glad that we have customers who talk about us positively in their social circles. We have a Facebook rating of 4.5 whereas some older players struggle to keep it at an average of 3. We also keep a track on Share of Positive Voice (SOPV), which signifies how many people are speaking about a brand positively, negatively and in a neutral manner in the digital space. We track this on a continuous basis for ourselves and our competition. And we are happy that our SOPV is 1.5 times higher than the competition and our Share of Negative Voice (SONV) is much lower.
Also, our NPS (Net Promoter Score) is 72, almost 3x the industry.
What is the future of insurtech in India? And what kind of support from the government and regulators do you get for insurance and finance digitalization?
Insurance is at an interesting cusp, where it is shedding redundancy and welcoming change. Change that is backed by fresh thinking and technology. And regulators too are recognizing these efforts and are supporting the same. There will be challenges when an age-old industry and systems start shaking but that’s for good. We as insurers would learn from initial hiccups, regulators will see the advantages of simplicity and will push the envelope with us and the consumer too will get more accustomed to this change esp. when it comes with the customization and lower costs for them.
Working with a number of different distribution partners, ability to customize journey and do all this at low cost will define success. We are already seeing this in our company, despite us being digitally-first, we are fostering growth partnering with institutional partners including top e-commerce companies & physical-store partners and also our strategic partners including dealers, agents & brokers.
Even in terms of models, we will see different models coming up including vertical insurance players, just like you see in e-commerce where there is only fashion as well as full offering portals. In terms of salience, we’ve already seen e-commerce companies themselves entering into the business as they have an active customer base and existing technology as their strengths. What would be interesting to see is how they build their resource capability as this is very much an industry built on the expertise of its human resources.
Finally, insurance will see changes across aspects, and this won’t just come from the new companies but also the traditional players. At the end of it all, wherever the inspiration comes from, the end-customer will be benefitted and that’s what a simpler world of insurance would really mean.
We're curious what is the current ratio of insurance providers versus customers - can you provide estimated numbers and how they are moving?
We are expecting India’s economy to grow to 5 trillion in the next 5-7 years. With general insurance premiums at an avg. of 0.9 % of GDP and increase in as per capita income, we can see it grow to a 45+ billion dollars industry. Right now, we have 34 general insurance providers and with a population of 1.34 billion. We are still massively underpenetrated.
How was the startup scene in India? Can you share the latest updates and business potentials?
Startup is the buzzwords across the globe and India is no different. There is huge excitement amongst youngsters, both as entrepreneurs and employees in the startup phase. Even the Government is now quite supportive of the startups, as they are realizing the benefits of the efficiency that they are bringing in and the potential they have. As a macro consumer and investor environment as well, startups are being encouraged.
Are 5G, Blockchain and Open Banking topics in India?
India is the largest per capita consumer of data. Data obviously, has dramatically improved speed for the everyday Indian. We are seeing a big difference to not just entertainment but also in the education & learning potential that good data speeds can bring to people. So, 5G will be advantageous.
Your top 3 tips about cost and process efficiency for an insurance business?
Tip #1 Segmenting customers: Analytics helps us do that, to be able to segment our customer base and also be able to cream out the good customers base.
Tip #2 Customizing products: After segmenting the customer base, the idea is to customize the standard products to increase the relevance of benefits. And also reward the good customer base more than the others to increase their conversion and retention.
Tip #3 Bring-in efficiency: Both in terms of distribution and processes. With faster, streamlined operations through automation and digital processes, we can reduce our operational costs and improve customer experience. With APIs with partners and customized buy flows for different channels, we can optimize the distribution.
Your top 3 books everyone should read and top 3 gadgets if you want to be involved in India's Insurtech?
The only gadget you require right now to enter insurtech is a great core solution for insurance. We need to understand how to optimize the usage for the smartphone to ease the processes for people and to gather relevant data points to be able to customize products for them.
I would recommend 3 authors whose almost all books I have read. Therefore, all books by Daniel Kahneman, Malcolm Gladwell and by the Father of our nation, M.K Gandhi.
Digit Insurance is a general insurance company founded by the insurance veteran Kamesh Goyal and is backed by Fairfax Holdings, started by Prem Watsa. They started operations in December 2017 and have had an investment of $135 Million until now.
When Digit's initial team got together, the one thing that bothered them was how much insurance was mistrusted by people. The insurance industry was struggling to gain the trust of the customers with traditional processes, lengthy and jargon-filled documentation and never-ending claims cycles. Ironically, terms and conditions that were written to maintain ‘clarity’ were looked with a skeptical or a helpless eye.
This introspection led to Digit's mission of ‘Making Insurance Simple'.
‘Insurance & Simplicity?’, for a lot of people in India, this sounded like an oxymoron. Well, for Digit, that's where the opportunity lied. If there was one thing that would truly make a difference to people in the insurance context, they felt it was busting complexity and bringing in simpler insurance.
With the way they have transformed the traditional insurance processes from onboarding to claims of the customer, they have witnessed an increase of 28x in its customer base i.e. 0.11 mn to 2.8 mn in FY 2018-19 with a premium of $174 million. Also, they closed over 35,000 claims in FY 2018-19.
They are being recognized globally as the fastest growing insurance company in the world and were ranked #5 among the most attractive start-ups to work for in India by Linkedin in 2018 and were featured in CB Insights top 250 fastest growing fintech companies globally in 2018.
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