Insurers in India are making full use of technology to sell insurance policies. Few days back an Indian trekker near the Everest base camp got a text message from a multinational insurer offering a 1 week medical cover for Rs 5,000 covering emergency air evacuation.
Although the insurer did not have any representatives nearby, it could identify potential buyers though the mobile operator’s GPS services and complete the sale over a smart phone.
This customized one-time cover is just one example of how the internet is changing the way insurance is sold. From location-based one-time covers to crowd-sourcing fraud, companies are pulling all stops to drive efficiency. A German insurance company is offering ‘friendsurance’ cover for cars owned by a group of friends on a social network.
A chunk of the premium paid by the friends goes into a pooled account and is used for paying out small claims. If there are no claims, the pooled money is shared among friends. The upside of this is that policyholders are wary of inflating claims and cheating their friends.
UK insurer Aviva targets younger drivers with an Android app that monitors the driver’s first 200 miles to determine individual premiums based on driving behaviour. Safe drivers are offered discounts of up to 20%. French insurer Axa uses apps for changing cars, reporting an emergency, or calling a breakdown service.
According to a report by Google and consultancy firm BCG christened ‘Insurance @ Digital: 20X by 2020’, the digital influence on insurance sales will explode by 2020 driven by smart phones and new applications that make it simpler for non-users to migrate to the digital platform.
“Digital can help address almost all the important issues that plague the offline world recently. Mis-selling will not be there because of transparency, prices will come down as manufacturers pass back savings in acquisition and servicing costs,” said Alpesh Shah, senior partner & MD, BCG.
The report states that not only will insurance sales from online channels grow 20 times from 2020, but overall internet-influenced sales would be Rs 3-4 lakh crore.
