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Big data helps insurers know their customers better

LiveMint logoLiveMint 03-04-2017 Deepti Bhaskaran

G. Srinivasan, chairman and managing director, New India Assurance Co. Ltd, talks about what listing of public sector general insurance companies means for the industry and customers, and how technology can help.

Public sector insurance companies have been given a go-ahead to list in the stock market. How will this bring focus on underwriting profits and on containing expenses?

The focus on underwriting profitability is irrespective of the listing of insurers. The market is extremely competitive and entry of new participants adds to the heat in the market. There are also issues relating to motor third-party segment, where the awards are increasing; but the pricing is not keeping pace with claims. The health portfolio, which is fairly big now, has issues of medical inflation and lack of regulatory controls on providers. Listing will certainly bring all these issues to the fore and make companies do all that is necessary to improve underwriting performance.

Changes to health insurance regulations have allowed insurers to pilot test products.What sort of health insurance products can one expect?

The idea of a pilot product is to make insurers test various possibilities. So, whether insurers want to design a product for a particular illness or for a particular event or duration, it’s possible to pilot test these products to gauge the market response.

Insurers need to file the product with the regulator and the approval can take about 3 months. If there are any changes to the policy, the product has to be re-filed. But now the insurer can first test the product, alter it the way she wants and then get it approved. Innovations are already happening. For instance, geography-based pricing is already used.

How has fintech improved the buying experience?

Fintech is playing a very important role in ensuring better customer connect, service and insurance distribution. The insurance sector is in early days (of using fintech) and much will happen in the days to come.

Customers can now buy insurance policies online anytime and use Web aggregators for comparison. The online platform has added to customer convenience in a big way. About 14% of our policies are sold online. Big data and use of health apps can help insurers understand their customers better, which will help us underwrite and price health insurance policies better. And we can use fintech to promote wellness programmes and make sure the policyholders keep a healthy lifestyle.

Fintech will boost the whole preventive care aspect of health insurance and we will see more of wellness programmes being launched.

Turnaround time for claims settlement remains a problem area for health insurance. How can fintech help in this aspect?

Health insurance claim settlements have been substantially speeded up. Technology will definitely play an important role.

But technology alone can’t help if there is no standardization, as claims go through several entities—from hospitals, to third-party administrators and then to the insurers.

And each entity has its own system of disseminating information.

Standardization of information would facilitate faster turn around time in a big way.

In fact, this is something that’s actively being discussed at various forums but we have not made progress to the extent we would have wished.

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