Category: Innovations

The Indian insurance sector is on the cusp of a transformative journey, with automation taking center stage. As the country’s financial landscape modernizes, insurers are turning to advanced technologies to streamline processes, enhance customer experiences, and reduce operational costs. Drawing inspiration from global practices, particularly from developed markets, the adoption of automation promises to revolutionize the way insurance is marketed, sold, and serviced in India, ushering in an era of efficiency and innovation.

In 2012, the Indian Insurance Industry was estimated to be US$72 billion in value. Within 9 years, in 2021 it soared to more than US$285 billion. The growth was nearly an increase of 300%. The credit to this rise lies in increased awareness among the people and better measures from the government.

In 2012, the US life and health insurance sector of the insurance industry alone accounted for US$645 billion in size. By 2021 this rose to nearly US$1.2 trillion. How they accomplished this feat is appreciable. There are things to understand and emulate from it. The biggest democracy in the world can learn how the biggest economy in the world handles its insurance industry.

This article delves into the current situation in the Indian Insurance Industry and how the US model of adopting technology through automation is a good guideline. The learnings can be used for not just handling the industry processes, but also accelerating the growth of the whole sector.

Traditional Methods And Automation In The Insurance Sector

While the financial value of the Indian Insurance Industry rose, so did the number of individuals availing insurance. From a mere 20 lakhs in 2012(0.2% of the entire population of 126.58 crores) to an exponential 50 crore(37% of the entire population of 136.64%) by 2021. There is no doubt that there is gain for the whole country. But the major takeaway from this for an insurer is the number of uninsured citizens. 86 crore is certainly not a small number.

The question here is why does such a huge portion of society not have insurance? In most western countries, a state-run medical system ensures the security of the health of its citizens. Thus, the need for medical insurance is minimal. Unfortunately, India can not afford to provide such a facility due to the massive size of the population. This results in individuals taking insurance policies for their life and health.

The citizens of India are not well aware of the need and benefits of insurance. Even the ones who are, find it difficult to access the versatile options insurers provide. Most documentations are not online and require hard copies. Most processing requires in-person interaction. Mediators and agents are sometimes unable to match the applicant to the right policy that will help them. And most of these important decisions are either left to the agent or the customers just pick the first policy that matches their current needs.

Overall the customers are not given much power in accessing or deciding what suits them best. Even if they find a good option, they are doubtful if it is the right option for them due to lack of clarity. Some may even drop the whole idea hoping nothing bad happens. Such a potential market is unused because their experience is not optimized.

How Has The US Insurance Sector Benefitted Using Automation

The US insurance sector is faring better than the Indian counterpart. This is despite the Indian Insurance Sector being superior with a growth rate of 12%-15% and the US falling behind with a 5% growth.

Having said that, health insurance claims fraud in India can be as high as 35% of the claims costs. This is less than 10% in the US. More than 75% of US citizens are covered under some sort of health insurance scheme. The strict regulatory initiatives from the government helps this. But the pivotal role is played by the measures the insurance companies take in protecting their customers.

Insurers protect their clients through increased security and safety while maintaining ease of access for them. The best way to do this is through applications of technology like Automation and versatile APIs. Automating the insurance industry includes implementing it from the get-go of applications to the rounds of claims approvals. Some of the ways in which automation helps the Insurance industry is given below:

• Improved Data Management and Customer Service– Automation eases data management. This includes information transfer, new applications, claims status, etc. freeing employee times for more critical tasks. Along with this, as most transactions are online, the customer doesn’t go through the troubles traditional methods demand.
• Online Documentation– Since automation uses softcopies of all documents, no physical effort or space is required for storing them. It is easier for the client to obtain and use these documents accordingly.
• Better Compliance- Insurance companies can easily comply with existing and new regulations and compliance advice. The easy automation and online processing make it easy for the changes.
• Enhanced Fraud Detection- Automation tracks all transactions and processing and call out any red flags associated with forgery or fraud. It can be more efficient and accurate at this than what a human element would have been able to do.
• Reduced Processing Time- As most steps in traditional methods are avoided, automation reduces the total time required for application, data management, and even claims processes.
• Increased Credibility- Customers find automated processes as no middle man can interfere with the pricing or the claims processing. Insurance companies find it reliable as no malpractice is missed and proper verification is done without unnecessary human interference
• Better Claims Processing– discrepancies and disputes relating to claims are greatly minimized as a basic standard is set with compliance with regulatory guidelines. The claims processing is also faster than before as many unnecessary steps in traditional methods such as submitting forms manually.

Where Is India Headed And What Can Be Learned From The US?

India is on a journey towards automation. This is not just in the insurance sector but the financial industry as a whole. As more and more banks and financial institutions are transforming into online platforms, it is only sensible for insurance companies to adopt equivalent methods for themselves.

Even the Government is encouraging the embracing of technology. IRDA launched an insurance repository on 16th September 2013. It enables policyholders and insurance customers to obtain and retain dematerialized or electronic policies. Thus, their policies are kept in an electronic format in an account called eIA(electronic Insurance Account). IRDA prescribed four insurance repository entities:

1. CDSL Insurance Repository
2. Karvy Insurance Repository
3. NSDL Database Management
4. CAMS Repository Service

Unfortunately, the major players in the industry are still reluctant in adapting to the new ways. Despite, the government’s reforms, many insurance providers still use hard copies of documents and multiple in-person verifications for applications and claims processing.

What the US did with their insurance industry is similar to what they did with their banking industry. They eliminated the steps in processing that are unnecessary or over-resourced. They specifically found the areas that had repetitive work and transferred the responsibility of their execution to an automated source. This in essence saved time, resources, and money.

What the Indian insurers can do in the initial stages is to make use of APIs for online applications and transactions. With Robotic Process Automation(RPA) the processes can be made more efficient. RPA is used to evaluate applications and documents for forgery, credibility, and validity. It is also used to obtain and retain necessary data associated with respective scenarios.

With advancing technology, even AI can be used for insurance process automation. But there are considerable roadblocks for that. The regulatory norms by the government still demand a human evaluation during claims processing. In time, this might change and more advanced technology might find its inroads into the Indian market.

Conclusion

Tapping into the untapped Indian Insurance potential is lucrative. Many companies understand this, yet do not acknowledge it. Indian customers primarily look for inexpensive and comfortable services. With automation, both these demands can be met. Additionally, such a step will provide financial benefits in the long run.

Adapting to modern times is inevitable in the world of cut-throat competition. The Indian Insurance Sector is becoming a cut-throat battlefield for many smaller companies. To stay ahead of the curve, it is wise to adopt newer technology that requires lesser efforts and more benefits.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

In a digitally advancing world, the need for automation is more than ever. This is mainly due to tech-savvy fintech and a surge in the demand for personalized user experience. Today, Intelligent Automation holds the power to accelerate growth. This can be done by integrating robots to digitize processes and systems.

What do we mean by Robots?

Robotic Process Automation (RPA) has been widely used by institutions. However, Intelligent Automation (IA) has been gaining the likes of organizations recently. Intelligent automation combines Artificial Intelligence(AI) and Process Automation to create smart workflows and business processes that think, learn and even adapt on their own. It and its modified forms are called Intelligent Process Automation(IPA).

Across financial institutions, IA has already helped companies drive productivity. This has been achieved by processing a range of structured and unstructured data.

However, the thought of shifting the burden of responsibilities to a robot might be an uneasy one. So without any further ado, let us burst the huge bubbles around Intelligent Automation in the financial sector.

Identifying Roadblocks And The Need Of IPA In Finance

Financial institutions deal with a lot of unstructured data from various sources. Manually processing this could be time taking. This also adds to the chances of error accounting to loss of the institution’s time and resources.

• Gartner’s research report on RPA shows that organizations had 80% of their data unstructured. It states how processes that are most suited to RPA have a high transaction throughput of structured digitized data. This comes with relatively fixed processing paths and/or user interfaces. They do not change frequently and are rule-based activities.
• Moreover, the banking experience must be customer-friendly. Providing a hassle-free and quick solution is a must. Leveraging IPA improves the institutions’ productivity. It also makes it customer-centric. This helps banks drive massive success.
• IPA can process even unstructured data. It improves the accuracy & eliminates chances of manual error. It can also help to validate customer requests by accessing emails and other relevant data.
• At the same time, it can process digital signatures and open bank accounts within minutes. It can execute transactions and account transfers and update the customer data into the CRM system.

Revolutionizing Banking and Financial Institutions Using IPA

Let us now see the applications of IPA and how it is transforming the banking and financial institutions.

Commercial lending operations: This life cycle starts with onboarding a corporate client. NLP, ML, OCR, and RPA can be leveraged to extract data from structured and unstructured loan documents and automate the entry of client data. This helps in the calculation of risk and loan eligibility. IA in commercial lending operations is a powerful and effective way to reduce costs. Along with this will help in improving controls, quality, and scalability.

Trade operations: Trade operations require multiple systems and high levels of documentation. IA can be used in several stages to extract data from different sources and formats. It also helps in identifying patterns and classifying the extracted data to get optimal results. IA can also be used in monitoring trade activities. Optical Character Recognition (OCR) technologies, as well as Artificial Intelligence (AI) algorithms, provide end-to-end automation of Trade Finance processes. Systems can improve their accuracy and spot red flags optimizing the use of capital. This can be done through supervised and unsupervised learnings,

Regulatory and compliance operations: There are several regulatory and compliance requirements in banking. This leads to high operational efforts, time and cost. Automation tools can be embedded in several processes. For example, data mapping and other labor-intensive processes. IA can be used to pick up KYC customers and automate the data into AML screening solutions. This can significantly reduce the cost and efforts of compliance operations. This will also help institutions overcome the challenges of inconsistency in data. This inconsistency is due to the long process and the chances of human errors. Several documents available in different formats can be collected. These can be further processed using NLP and OCR technologies.

Transaction screening: An ML engine can identify suspicious patterns and automatically remove them. It can also leave an audit trail of every bot decision for compliance reviews. This significantly reduces operational effort. IPA reduces variation in recording data improving consistency and accuracy. At the same time, it can continuously learn and improve quality over time.

Payment operations: Intelligent automation reduces the manual effort to investigate payment issues. ML can be used to identify a pattern in the payment processes of the customers. Issues related to payment processing can be fixed and suspicious transactions can be identified.

Manual labor is required to process and reconcile invoices. It is also needed to purchase orders in multiple formats. These can be simplified.

Customer Onboarding: The process of KYC collection and verification can take up to 24–30 days. Embedding IA in workflows speeds up the onboarding process. It brings the turnaround time to 2–10 minutes. Relevant data is extracted from the customer’s documents. Then an extensive background check is done by the system. Advanced analytics also help in assessing the potential risks. This also helps in providing a smooth, hassle-free customer experience.

Extending Support To A Wider Spectrum

IA helps banks and FIs stay competitive. It also helps evolve in terms of customer relationships. The capability of IPA solutions to self-learn based on a given set of rules is what makes it unique. Let us look through some other aspects where IA can extend its support.

Predictive analysis- Technology and several statistical techniques can help institutions. These can collectively make a better prediction about the forthcoming future events. Data mining, machine learning, and predictive modeling can help in analyzing the data. It can also gather facts from the present and the past to make better predictions. Incorporating IA with predictive analysis would ease the processing of the data collected. This will collectively improve automated end-to-end decision-making.

Fraud Detection- IA can prove to be critical for anomaly or fraud detection. IPA is capable of processing even unstructured data. Due to this, gathering transactional or other relevant information related to the identity verification of the user will become much simpler.

This collected data then can do an extensive background check of the said user. Any suspicious or fraudulent activity will be notified to the institution. Automating this process reduces the manual labor and time taken. It also increases the accuracy. It can also be used in online, credit/debit card transactions.

CRM systems- Customer relationship management (CRM) systems are useful tools. They help sales employees stay updated with their customers. Automating the update of the system will save the precious time of employees. It also increases accuracy. Employees working in the sales function can focus on maintaining customer relationships. Unstructured data saved in various formats can be processed using IPA.

Tech support- In a digitally advanced world, simpler customer interaction is a must. IA can help solve simple issues. Ex: password resets. It can also diagnose issues by asking a series of questions. This saves the institution’s time and also improves the overall customer experience. Incorporating such technologies will help address the grievances faster saving manual labor.

Financial reports- Aggregating data for financial reports can be a tedious task. Ex: Data on quarter-end. Gathering, processing data from different sources and formats can be made simple and faster with IA.

Benefits of Applying Intelligent Automation In Finance

IA tools can perform a series of tasks ranging from basic data entry to complex risk analysis. IA tools can also be leveraged for dynamic feedback learning. It is also useful for identifying patterns and detecting anomalies. Institutions can benefit from the application of Intelligent Automation in the following ways-

• Reduction in manual efforts- Incorporation of IA can reduce the manual grunt work. Automation of structured and unstructured data processing reduces the burden on employees. It also eliminates the scope of manual error.
• Increases productivity- Employees can then focus on higher priority tasks. This is because time taking tasks are automated. This will improve both the quality of work as well as the work-life balance of the employees
• Better Customer Experience- IA allows institutions to track the progress of work at every step. This end-to-end audit trail is beneficial in optimizing results, thereby making the customer experience far better.
• Reduced operational costs- Digitization ensures better risk assessment and assists in faster decision-making. The processes are executed efficiently at a higher speed. This creates a great value for resources.

Conclusion

Intelligent Automation can be incorporated into many such labor-intensive processes across various sectors. It can help in identifying the sources of inefficiencies. It also ramps up productivity effectively. Fintech providers are emerging with simpler solutions with applications that improve customer relationships. Implementing IPA will allow institutions to significantly reduce risks and improve decision-making. Manual resources can then be used to work on high-quality optimal tasks.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.

Car insurance formed 39.4% of all non-life insurance markets in India combined. A major reason for this is India’s swiftly expanding Automotive industry. Automobile sales in India have risen to a 7.01% CAGR between 2013 and 2018. This constitutes the sale of nearly 25 million vehicles in 2018 alone.

The growth in the industry is not going to wane any time soon. But the competition in the field is not getting any easier either. Each Insurer is trying to offer better rates and offers for the customers.

This will be a chance for Insurance institutions to grab a bite of the impending opportunity. They should use every trick they can find to increase customer satisfaction and decrease costs. And the best in the quiver is automation of the entire industry. Automation brings forth other advantages like better customer experience and lesser processing time. This article has a detailed look at how companies can do it and how a few are already doing it.

The Growing Indian Automobile Market And The Potential It Holds

Motor insurance unlike most other insurance options is mandatory. It is used to insure any type of motor vehicle, be it two, four, or eighteen-wheeled. This is for our safety and the safety of others on the street. They do not just cover the motor vehicle but also to an extent, the health care of the individuals involved.

In 2019 India became the fourth largest automobile market superseding Germany with nearly 4 million units sold. By the end of 2021, the country is expected to ascend to 3rd place displacing Japan. Domestic production increased by 2.36% CAGR between 2016 and 2020. All this reinforces the incredible growth of the Indian market.

Unfortunately, A large number of vehicle owners in India are not renewing their insurances because of Insufficient enforcement, Substandard follow-ups by insurers, and increasing third-party cost covers.

The Insurance Information Bureau reported that the ratio of uninsured vehicles increased from 54% in 2018 to 57% in 2019. This implies that more than 13.2 crore vehicles on the street are uninsured. For a country with nearly 50 lakh registered accidents, that’s a lot. The operative word here being ‘Registered’.

The bulk of the uninsured are two-wheelers and vehicles bought at lower cost points. We can infer that owners in this segment consider even the current prices unaffordable. If the prices can be lowered by the insurers, it might will help bring in more customers.

The Existing Claims Process In The Vehicular Insurance Industry

The automobile insurance sector has been afflicted with immense pricing competition, high costs of acquisition, sparse product innovation, fraud, and abuse in vehicle repair networks. Although this has changed over the past decade, many insurers consider cost control to be a solution over better risk selection methods. This might not be the general norm, but it is a possible option many opt for.

In India automobile insurance is classified into primarily three categories:

• Private Car Motor Insurance- all privately owned cars and four-wheeled vehicles.
• Two Wheeler Insurance- constitutes all two-wheeled vehicles like motorcycles and scooters.
• Commercial Vehicle Insurance- includes trucks, taxis, and other commercial vehicles.

Discounting some major corporations, most insurers in India still onboard their customers and provide services in the traditional ways of the past. This not only does produce a bad customer experience but also increases the cost and time required. Physical applications are obtained and processes are conducted in person expending hours of both the agent and the customer.

The insurance claims process is a brutal experience for many customers as multiple documents have to be submitted multiple times to prove their claim. These documents range from the basic policy number to the copy of the vehicle inspection address details. This is tedious and cumbersome for the clients.

There are three major types of claims:

• Third-Party Claim- covers any damage to third-party property and healthcare.
• Own Damage Claim- covers any damage to your property and healthcare
• Theft Claim- Covers compensation in cases of the vehicle being stolen.

The processes for each vary vastly and are confusing to the customer. A systematic method of maneuvering these hurdles is lacking and would help enhance customer experience.

Claims Automation- How Will identity verification API Change The Process?

Traditional methods for verification demand manual assessment and submission of these photos and documents by claims officers. In which case, automation is entirely absent. It may take some hours or even days to assess the extent of damage. Claims automation makes the process require lesser effort from both parties. Most documents can be submitted in soft copies and identity verification API is used to validate and obtain data from them.

This helps insurance inspectors or concerned personnel to fast-track their processes. They can immediately store and retrieve data regarding the case through an online database system. This database system is usually composed of identity verification API that can be selectively used.

In advanced markets, RPA and AI are used for even evaluation and the validity of the claim. In a prime market like India, such innovation requires some more time. But eventually, the process will become completely automated.

Even documents are captured and processed with the help of identity verification API. The credibility of this process is better as the process is performed through strict automation avoiding human errors. The entire process can be simplified with a smartphone application for the processing. In the Back office, the assessment data is analyzed through human intervention. This double-checks the process and ensures the lack of any error.

Advantages and Disadvantages of Automation in Car Insurance

Automation through RPA and AI brings forth multiple advantages for the insurers and the customers. But a detailed insight is needed to have a better understanding of how exactly it benefits the sector and where it could have some improvements.

The Advantages of Claims Automation in Automobile Insurance include:

• Time for claims processing is reduced from 5–10 days to a matter of minutes as identity verification API is used to process documents, images, and other data for verification and validity of the claim.
• More number of claims applications can be processed as the time and resources required for assessment of each is drastically reduced.
• The overall cost for the insurers is reduced as time and resources are considerably reduced. This in turn decreases the overall expenses which can either be added to the company profits or used to reduce the cost of premiums. Thus, attracting more customers.
• Automation enhances efficiency and develops cutting-edge equity in the procedure.
• As the assessment and processing are not prone to much human error the credibility is increased in cases of disputes and disagreements. This gives more validation to the insurers’ stance.
• The efficient automation processing prevents fraudulent claims. As it is much harder to fake an accident or other modes of fraud like fake documents, fraud rates can be reduced to a great extent.

Unfortunately, the current automation methods have not reached their absolute potential. Due to this, they have certain areas of improvement that need to be addressed. Some of them are:

• It is still not fully automated. Thus, human intervention to an extent is unavoidable. Perhaps in the future, this too shall be solved.
• Assessment is still manual as the claims officer must perform this manually to an extent. This is something that can be improved in the future
• Proper management of Cloud data storage and IT security is needed in Automation. The system must be foolproof for hackers and external disruptors.

Conclusion

The booming automobile industry is a lucrative opportunity for insurance companies. But with the newer norms from the government, the competition is only set to increase. As mentioned before, tackling this requires newer methods for processes. Is it not obvious that automation is a better path to take from the stagnating anchors of traditional methods?

Automation through identity verification API, RPA, and AI will create a smoother and easier experience for the claims processes. Its credible assessment and processing of claims bring more validity to the insurers. Overall the industry is set for a change through this. Some of the insurance companies in India like the IFFCO Tokio General Insurance Company Limited have adopted AI to a whole new level. But this is not the case with existing insurers in the automobile industry.

While embracing the perks of Automation, we must acknowledge one other factor. Automation is evolving. This evolution helps in making the processes and in essence our lives more comfortable. Hence, all the players in the industry are predestined to adapt to technology or fall in the coming age of transformation. The right choice is easy to see, but to accept is a bit more tricky.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

Visit www.signzy.com for more information about us.

You can reach out to our team at reachout@signzy.com

Written By:

Signzy

Written by an insightful Signzian intent on learning and sharing knowledge.