Expanding Coverage: How Insurance Solutions Aim To Reach The Last Mile

Let us look at developed economies and our country, the trends, and what we are doing differently. So, if you look at a developed market, you will find that the general insurance business is larger than the life insurance business. If you look at the Indian market, the life business is three times bigger than the general insurance business.

You would wonder why it is so. (That’s) because if you look at emerging economies, people’s safety nets are either a life policy with many investment components or fixed deposits. However, as wealth creation happens, mutual funds and other alternate investments start building up, and people start looking for core insurance solutions. With asset creation, (general) insurance starts building up. So, in my view, the general insurance business has a very bright future. 

As the country’s economy continues to grow, from the fifth largest economy to the third largest, a lot of asset creation occurs, and the general insurance business will keep on growing. It has grown in double digits in the past 20 years, and in the next 20, it will also be the fastest-growing insurance market in the global context. 

When it comes to providing a social security net for the citizens, you will see numerous schemes are in place. For example, there’s the farmers’ crop insurance scheme. However, we have only 25 per cent of the farmers covered, and this percentage needs to move up to 70 per cent. In the US, over 70-75 per cent of farmers are covered, and China is also making progress in this area. Then come the small and medium enterprises (SME) and the micro, small, and medium enterprises (MSME) covers. You see catastrophic losses happening due to global warming, floods, and other related issues.  

So, solutions for all that will start coming into the picture. You will see solutions reaching the last mile. The number of lives covered would be like everybody; you will (also) have coverage for assets. 

The industry has to move at a rapid pace in terms of making it friction-free for the customer experience to be good because customer behaviour is changing. I look at my children, and I notice that everything has to move very fast for them. Decision-making and problem-solving have to happen at hyper speed. The insurance industry should also make sure that they can provide their customers with friction-free and personalised experiences. With AI and machine learning entering the picture and your dependency on technology moving at a very rapid pace, new risks are emerging at hyper speed.

It’s an exciting time for the general insurance industry. 

I have always said this, and let me put this disclaimer, so people don’t get me wrong, I was the tech head 27 years back. Tech is a tool. One should not get carried away by the tool. (But) what it is solving is the (real) issue. I have said at different forums that there should be a high level of empathy to figure out solutions that impact society, individuals, families, or organisations. And to bring such solutions, you should have enough knowledge about the kind of tools available. If you don't have, talk to people who have that knowledge, or hire them. 

Now, put that together and think of a solution. Just saying that I am an insurance tech does not sound impressive to me. If you tell me I am solving this problem and I am using machine learning, AI, Blockchain, and so on, to solve something, that's impressive.  

Let me give you an example. During the Covid-19 pandemic, nobody was aware of how to treat the virus. Many different remedies and treatments were suggested, but do we realise that insurance companies across the world were building databases very quickly in terms of what’s working and what’s not working? Because as the claims came in, (you had the experience to see in which cases) the recovery was fantastic, and in some, it was not.  

They have the data. If all the data gets connected to the big data, you would be able to infer at hyper speed what works for whom, you could have saved millions of lives. 

To me, that is a good use of putting data together in a data lake, running a machine, learning at hyper speed, and solving the world's problems, but the solution is from here. And then you go to the tech part of it and put that together.

We can make something like friction-free life insurance. Although I’m no expert in life insurance, I hear a lot of my friends from the life insurance industry say that if they get access to the death registry and get information on a real-time basis, they can settle claims completely friction-free. Now, if you bring the data together, there’s an immediate solution for millions of people. You take away fraud and create a friction-free mechanism.

Let’s say when a police officer cuts a challan for a vehicle without insurance. Currently, they simply issue the challan. But imagine, if the challan you get is uploaded at that moment, the distributors would be saying, “Okay, now this person out here has a challan and requires insurance” and would reach out to the individual. 

I think India is very developed in terms of the technology and the databases that we have. Somebody has to think about the problem and the solution, talk to the right people, stitch it together, and then see it make a huge impact.  

I am an eternal optimist and the wrong person to talk about challenges. I have always believed that if you have passion and drive, you will find ways to solve problems. So, let me talk about some challenges I face and what I have learned over time in trying to solve issues. 

Initially, I used to feel, “why are people not excited about it”, and I would go and talk to people and tell them this is how we can solve this, but the reaction was (a bit muted). So, the first challenge is that.  

The next challenge is at the stage where people understand what we are talking about, but not putting things together at high speed. After some time, I realised everything was falling into place. So one of the biggest lessons I learned is to have patience. The second challenge is understanding that it takes much more time than you would expect.  

The third challenge is to have all the requirements of regulations and the law in terms of privacy and other aspects. Finding a way through without violating them is, therefore, a challenge.  

Another challenge would be in terms of the cost involved and the public perception.