The telecommunications system in India is the 2nd largest in the world. Government and several private operators run local and long distance telephone services.

Competition has caused prices to drop and calls across India are one of the cheapest in the world. This article attempts to find or project the use of mobile phone technology in Insurance Business in India. Though we are having close to 900 million telephone subscribers, we are yet to make a concrete beginning either in insurance or in healthcare…

Please read on….

What is the reach of mobile phones in India?

How many consumers and potential clients can be reached via mobile phones in India?

Reference is made to a report released via Reuters: During the last 10 years close to 880 million Indians have acquired mobile phones thus registering a phenomenal growth from an abysmal 2001 subscriber base.  Telecoms companies have leveraged this substantial level of “cellular” adoption by investing aggressively in infrastructure, and advancing mobile services and capabilities.

Mobile penetration in India now stands at 70 subscribers per 100 inhabitants, compared to fixed-line penetration of only 16 phone-lines per 100 inhabitants. This demonstrates how India has, quite uniquely, managed to leapfrog the telephone-line stage of development, and dive straight into mobile technologies.

The most important implication of this growth for suppliers of mobile insurance solutions is that market access will be easier in India than in developed countries due to less stringent, and underdeveloped, regulatory environments.

Insurance sector to benefit from mobile phone technology

Choosing, buying and renewing insurance could become simpler, more customised and even provide pay-as-you-use policies through the adoption of mobile phone technology by insurers.

According to the latest reports Mobile Innovation which is the next frontier for growth and productivity for insurers, has identified new opportunities for the insurance industry to improve the use mobile phone technology in delivering services.

The success and continued growth of the life insurance industry is critical to the economy, and it is critical to all individuals and their families who rely on insurance to ensure the financial stability and wellbeing for their family.

Mobile applications provide insurers with a new opportunity to create a more interactive and ongoing relationship with their customers. The use of mobile technology can also assist in the underwriting and claims processes and thereby make the process of arranging life insurance cover and claiming on a policy easier, simpler and less time consuming. India has a chronic underinsurance problem and anything that makes it easier for Indians to access life insurance is a benefit.

How mobile technology can assist insurers?

India is one of the world’s most expanding mobile markets. However, today, only not even 2% of Indians are using their mobile-connected devices to search for and make decisions about insurance. Further, most Indian insurers are yet to offer any mobile applications for its employees, customers, agents or brokers.

There are three technology experience concepts to help insurers better support customers and improve their business growth and productivity:

• The Mobile Insurer – mobile phones and the mobile network can provide location based information that connects with existing communication technology infrastructure and enterprise systems inside the insurer to deliver streamlined customer service.
• The Mobile Consumer – using the knowledge and data insurers collect on many products and services, insures can provide advice to their customers through a mobile application to provide relevant and timely information to assist consumers in their purchasing decisions.
• The Connected Insurer – evolving Machine-to-Machine technology such as telemetry that enables insurers to provide new classes of value added services such as pay-as-you-use policies.

Mobile enabled technology has the potential to deliver growth for insures through greater customer loyalty and category growth. It can provide greater convenience, personalisation and pay-as-you-use premiums as well as provide the opportunity to better connect with customers.

Mobile phones have changed the way many consumers do business. More and more applications allow for easy and swift mobile payments on smart phones. Even in developing countries like India advanced mobile phone technology exists – it is now up to business to bring the business products to the consumer.

Healthcare via mobile phones

It is not only business who is to benefit from the expansion of technology across India. There are also new applications in healthcare, and according to the latest research; health systems in India are uniquely positioned to benefit from this mobile revolution.

Information and communication technologies have the potential to help poor countries strengthen their health systems and move towards attaining the Millennium Development Goals. Government in India must launch various telemedicine initiatives aimed at extending health services provision.

What is Telemedicine?

Telemedicine is essentially the use of technology to provide health services when the medical professional and patient are separated by distance. A classic example is that of a specialist located in an urban hospital treating a patient at a distant clinic via e-mail or video conferencing. Telemedicine in this form represents the perfect solution to India’s battles with persistent shortage of qualified health professionals.

The mobile phone platform has unlocked unprecedented opportunities for the provision of services to millions of India who previously had no access to technology and were virtually unreachable. The mobile phone is being leveraged to provide services at less than 25% of the cost of traditional healthcare delivery models.

Insurance and Mobile phones

What are the potential for selling insurance?

According to a Lloyds study in 2009 the market for efficient, cheap and simple insurance in developing countries is estimated to be between 1.5 and three billion policies. The ubiquity of mobile and strength of the brand makes Mobile Money the ideal platform to deliver financial services in India.

It should be clear that many consumers in India can be reached via mobile phones – and insurers will need to be  pro-active in pursuing these markets! Those who do not seek to benefit from the explosion in mobile phone technology will do so at their peril!!

Mobile phones have become an important medium for doing business – and insurers recognize the potential in allowing consumers to make purchases via their mobile phones. The insurance industry is highly competitive and insurers are in a constant race to develop new products to give them “the edge” over their competitors.

It should be expected that many of these new products will recognize the increased availability of affordable smart phones such as ‘Aakash’ as well as the increased willingliness with which purchases are made from these devices.

It is easy to find life insurance online. It appears that online is not limited merely to finding and purchasing insurance from behind the PC and laptop – but now also from the mobile phone! This partnership can deliver a product which enables consumers in India to purchase life insurance with their mobile phones.  This product can be designed to meet the growing demand for insurance services across developing markets.

Do you know – South African insurers have launched the first “whole life cover” mobile insurance service – allowing users to purchase, view and administer up to R500 000 life cover via their mobile phones! The proposition is to be simple and convenient by giving clients the flexibility to deal with their personal insurance needs via their channel of choice, providing them with more personal control of their life insurance needs.

By: Dr. K. Raja Gopal Reddy, Phd, FIII, FCII (UK), FLMI (US), Chartered Insurance Practitioner, Published in The Insurance Times, June, 2012