Fintech Festival India 2024: Insurance Industry Insights

Themed around “Connecting innovators, co-creating the future of finance,” the FinTech Festival India 2024 (FFI 2024) convened at Yashobhoomi, New Delhi, Asia’s largest convention center, from March 6th to 8th, 2024. VISoF, the InsurTech Platform from Binary Semantics, was honored to take part in the event. Throughout the gathering, the VISoF team actively engaged with a multitude of insurance industry leaders and experts who align with our shared objectives. 

The discussions and insights gathered from the Fintech Festival shed light on crucial aspects shaping the insurance industry’s trajectory. Here, we delve into key takeaways and the pivotal role VISoF plays in driving innovation and meeting evolving insurance industry needs. 

Shaping the Fintech Frontier: A Brief from FFI 2024 

The conference agenda of FFI 2024 was structured around four fundamental pillars: Innovation, Global Collaboration, Regulation, and Inclusion. A captivating feature of FFI 2024 is the presentation of solutions from the Scale +91 FinTech Hackathon. The top 20 highest-ranking finalists unveiled their groundbreaking ideas and initial products at the Start-Up Zone. The most important highlight of the event was the presence of Chief Guest Shri Ashwini Vaishnaw, Minister for Railways, Communications, Electronics and Information Technology and his address on Indian Fintech landscape. 

Read More: Insurance Transformation with VISoF Integration APIs 

Key Insights Discussed Regarding Indian Insurance Industry 

The FFI 2024 in general observed that the Indian insurance landscape is undergoing a significant evolution, spurred by changing consumer behaviors, regulatory reforms, and the relentless march of innovation. 

“Over time there will be three types of inclusion. That is Digital Inclusion, Financial Inclusion and Insurance Inclusion” 

The specialists sought to enhance insurance penetration in India, acknowledging the dismal 1% penetration rate in General Insurance and a mere 3.5% in Life Insurance. 

The Indispensable Role of Technology 

When asked about the influence of technological advancements such as Big Data and AI in the insurance sector, Kamal Kumar Kaushik, the Chief Operating Officer of MSME at Fusion Microfinance Ltd, remarked, ” Technology has changed the way we source the customers. For example, Technologies like AI, Block Chain, Chatbots are much used by many insurance companies”.  

He also emphasized that during his visit to a certain company, he observed that they do not have a single printer in their office, as they adhere to a “zero paper approach”.  

In addition, a panel participant mentioned that technological progress has significantly contributed to streamlining business operations in the insurance industry. As an example, he quoted the acquisition of a Niva Bupa health policy involves approximately 90% online procedures. 

The panelists noted that  

  • Machine Learning (ML) enables the processing of entire documentation online, streamlining the process significantly. 
  • Big data is leveraged in underwriting to forecast risks, identify fraud, and address other pertinent issues. 
  • Blockchain technology and big data are utilized in claim settlements, enhancing efficiency and transparency in the process. 

In an ambitious statement, a panelist projected,  

“With the help of tech intervention, the insurance business is going to be very very simple and easy. May be in future, we even get a policy by just blinking of an eye.” 

Affordable Policy is Still Out of Reach for Masses 

The experts pointed out that the average ticket size of a life insurance product sold by a bank in India stands at Rs. 75,000. They further questioned the affordability of such purchases for the average Indian, highlighting the potential financial strain it may pose. Additionally, they noted that various costs, including agent visits to customer locations for policy sales, contribute to this price increase. 

Last Mile Solutions Lack Data 

In her keynote address on “Financial Inclusion and Fintech Driven Insurance Solutions,” Nalini Venkat, President of Strategic Partnerships and Head of Institutional Business at Digit Insurance, emphasized the challenges associated with delivering last-mile solutions in the insurance sector.  

She highlighted that traditional insurance products typically cater to the upper-class, upper-middle-class, and middle class segments. While fintech platforms have access to extensive individual data such as credit history and income level, extending this capability to lower-income groups and rural self-businesses remains unfeasible. So, determining their capacity to buy insurance products is extremely hard.   

Read more: From Slow Claims to Instant Payouts: How AI is Changing Insurance 

Driving Growth and Digitalization: Strategies for Indian Insurance Industry 

Utilize the Role of Local Languages in Indian Insurance 

Experts unanimously agreed on the importance of utilizing local languages to drive growth in the Indian insurance industry. Moreover, a professional discussed a three-step framework for enhancing communication within the insurance industry. He said,  

“Application of Vernacular language, simplifying the insurance documents and incorporation of audio-visual communication like short YouTube videos are important as most of the insurance companies’ policy brochure, policy documents are available only in English” 

Integration is the Key to Penetration 

One expert on the panel proposed a strategy to enhance insurance penetration, particularly in general insurance. He suggested, 

“Fintech’s can integrate the motor garage shops in the rural and semiurban areas like the way Paytm has integrated the last mile merchants. This will fuel the penetration of general insurance products” 

Another panelist emphasized that Digital Insurance Solution is the only way forward for a smart ticket size. He highlighted that digital solutions offer lower acquisition costs and have the potential to penetrate the market effectively. The panelist stated, 

“With increasing connectivity, technology is the right mode to sell simplified products, palatable premium, easy to understand and instant gratification”.   

Reflecting on the pivotal role of technology, the panelists also emphasized the critical need for security measures. They advocated for the integration of robust fraud defenses directly within the technological infrastructure to prevent potential harm to consumers and institutions. 

The digital policy generation and distribution platform by VISoF is meticulously designed to address these challenges head-on. By utilizing this platform, physical travel and verification become unnecessary. Further, from quotes to post-policy actions everything is seamlessly conducted digitally. 

Like the panelist mentioned, VISoF’s Digital Insurance Solution offers seamless integration with multiple third-party services, such as vehicle manufacturer insurance systems, broker accounting platforms, and customer self-service portals.  

With state-of-the-art integration with data authentication platforms like Vahan and Aadhar, VISoF ensures secure and efficient interactions. VISoF also have the capacity to integrate across multiple models, fintech platforms, various accounting, and financial analytical systems as well.  

Read More: Combatting Insurance Mis-selling: Insights and Solutions 

Create Digital Office with Robust Website 

Insurance service providers can establish a robust website, essentially functioning as a digital office, where they present all concepts in simple language and format. 

50% of the people before buying policy do online search and out of that almost 30% get converted into policy 

Citing the aforementioned statistics, a panellist emphasized the necessity for every insurance service provider to develop a robust website. This approach, they argued, would effectively address challenges and notably reduce intermediary involvement in the insurance process. 

Insurance service providers can establish a robust website, essentially functioning as a digital office, where they present all concepts in simple language and format.  

VISoF provides comprehensive portals covering everything in insurance from obtaining quotes to managing leads and processing claims seamlessly. Our micro and macro services architectures handles all aspects digitally, including claims processing, endorsements, cancellations, and policy renewals.  

We enable integration with SOS services, implement single-page applications, and integrate with SMS/WhatsApp and e-KYC for enhanced functionality. We swiftly adapt our portal/API to regulatory changes by IRDAI and ensure end-to-end encryption for data security in the cloud. 

Affordability with Smart Payment Options 

Nalini Venkat highlighted that the policy premium should be made palatable. She even said that a typical shopkeeper may struggle to afford a premium of 8000 rupees.  

Instead, offering finance options such as 800 rupees per month for a family of four with a coverage amount of 3 lakh rupees would make the premium more manageable and affordable. VISoF system supports financing insurance premium feature as well. 

BI Tools and AI in Tackling Last-mile Challenges 

Nalini Venkat emphasized the importance of digitalization, stating that it requires a plethora of Business Intelligence (BI) tools and Artificial Intelligence (AI) and Machine Learning (ML) algorithms to effectively determine: 

  • Propensity to buy: This involves assessing individuals’ purchasing capacity and pinpointing the appropriate target audience. 
  • Propensity to claim: Higher CIBIL Scores correlate with reduced claim probabilities. This connection can be leveraged to align payments with premium amounts paid. 

VISoF offers a cloud-enabled, in-memory analytics engine designed to empower insurance companies with advanced analytics, machine learning, and artificial intelligence functionalities to extract valuable insights like propensity to buy, propensity to claim from the data. 

Additionally, VISoF boasts a virtual agent chatbot equipped with secure conversational AI technology and is compatible with voice-based assistants like Alexa and Google Home. It also facilitates automated messaging across platforms such as WhatsApp, email, and SMS. 

Read More: Customer Intelligence for Insurance: Harnessing Strategic Insights 

Conclusion 

As key players in this dynamic ecosystem, it is imperative for insurance companies to adapt swiftly to these shifts, leveraging technology to drive efficiency, enhance customer experiences, and expand market reach. With its transformative offerings, VISoF is poised to revolutionize the insurance sector and meet the evolving needs of the industry and its stakeholders. 

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