A Bustling Market and Its Many Crusaders

Virtual conferences in insurance have become regular fare this year. In tune with flavors of the season, conference hosts have been excelling in lining up a distinguished cast of speakers.

In the past week, I was privy to two well attended conferences, which were remarkable in the choice of stakeholder group representation. Along with incumbent and insurtech leaders, part of these thought-provoking exchanges were top regulatory, distributor, legal and fintech executives who enlightened attendees with their unique perspectives.

The first event was the 22nd edition of CII Insurance & Pensions Summit. It was kicked off by the Regulator Chairman and CMD of a leading private P&C insurance in India.

The second event was the ITC+DIA World Tour held on successive days at multiple locations. The tour covered Nordics, Turkey, Indonesia, Japan and India last week.

In the first event, which received press coverage here and here, sector performance which saw gross premium for life grow to $59 billion and non-life to $25 billion in the last 8 years at a CAGR of 15 percent, was appreciated. The Insurance Regulatory and Development Authority Chairman spoke about two standard corona policies that they mandated, an indemnity and a fixed-benefits based, which did well both in penetration and claims, after it was introduced in July. The Chairman of Bajaj Allianz General Insurance spoke about how the work done by stakeholders helped establish the credibility of insurance as a service that offered resilience.

The session on insurance distribution was riveting, with an eclectic mix of industry leaders. The moderator was the CEO of a life insurer which leverages bancassurance as a primary channel. He explained how banca has been instrumental in increasing reach and expanding size of life insurance, delivering more than half of new business premium.

Insurtech was represented by CEO of Acko, a 3 year digital insurer, now Amazon’s partner for selling auto insurance in India. He elaborated on D2C challenges in auto insurance. As OEM model is dominant in initial car sales amid intense competition, they have targeted the non-OEM market which is a bigger share. Their first year digital acquisition costs experience was comparable to traditional channels and benefits have accrued from the second year, with no commissions involved, translating into lower premiums. This has necessitated strong retention strategies to ensure that leakages were minimal and repeat business high. He conceded that while branding and convenience were vital to draw business to a startup, price competitiveness was non-negotiable.

One of the largest payments platform, with more than 100 million active users and two billion monthly transactions, PhonePe’s founder said it has gained substantial traction on user base and per capita consumption growth this year. Customer data and insights have helped finely segment users and sell insurance, which they recently started selling through bite-sized health products during the pandemic. Similar insights were offered on the DIA+ITC event by co-founder of Mobikwik, another popular payments platform. The growing interest of fintech and platform players in insurance was starkly evident.

Incumbents and insurtechs in these events admitted to working with multiple partners and acknowledged the need to collaborate with platform innovators with better solutions and data. Their strategy continues to be to own the relationship, while piggybacking partner offerings to finetune market segmentation and reach untapped strata.

On the claims session, panelists revealed that claims experience over the last 5 years has been lauded in customer surveys. Availability of external data has reduced the amount of information solicited from customers at the moment of truth. The trust deficit issue was brought up, which called for regular communication in different fora. Benefits of automation and intelligence in claims were reiterated with examples from the panelists. Insurance companies cannot do all by themselves, was often the undercurrent of discussions.

Pic Credit: Pietro Soldi

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