Insuring the Future – How the Insurance Sector is transforming through technology

Nitika: Hi, everyone, and welcome to another episode of the Zinnov podcast. I am Nitika Goel, CMO of Zinnov, and your host for today. During this pandemic, the insurance industry has had to kick into high gear. They’ve had to adopt newer models to drive innovation and to do their part amidst this global crisis. With the entire healthcare ecosystem being at the frontline during these trying times, the insurance industry has been playing a key role in helping the industry remain resilient. To understand more on the role of the insurance industry and its part in building business resilience, I have with me today, KV Dipu, President – operations, communities, and customer experience, at Bajaj Allianz. With more than 25 years of industry experience, Dipu specializes in business process reengineering and driving digital transformation, the need of the hour in today’s scenario. Welcome to the Zinnov podcast Dipu.

Dipu: Thank you so much, Nitika. It’s an honor to be here. And I look forward to the conversation and hope to add great value to the audience.

Nitika: Absolutely. We’re looking forward to it, too. So, one of the questions I wanted to pose is that, while COVID has impacted the entire insurance industry at large, as well as your organization, what are some of the customer as well as business changes that have taken place?

Dipu: So, Nitika, I will break into two parts. Firstly, you spoke about business changes. And then you also spoke about customer changes. If you look at it from a business perspective, since insurance caters to different lines of business, we have seen a shift – for example, at the onset of the pandemic, when car sales were down, motor insurance being an allied product, in the sense that only when cars are sold, customers buy motor insurance, we did see an impact there. Similarly, right now travel is down and out. So, travel insurance obviously has not got off the ground. At the same time, there has been a surge in interest in health insurance, and property insurance. And going forward, since everything is going to be digital, we do expect cyber insurance to be the new frontier. Coming to the arena of customers, Nitika, we’ve seen quite a few changes. For starters, customers do expect insurers our partners as well, to offer them an array of digital services, because, during the lockdown, services need to continue unhindered; and insurance is an essential service, especially, health insurance. Secondly, we have also seen that while we have all moved from a work from office environment to a work from home environment, we are operating in the new normal. While the new normal is a much used and a much-abused term, what we need to recognize is that new customer needs will emerge as we go into this phase, and therefore it becomes important to keep a sharp eye out for that and ensure that we not only meet customers’ stated needs but also their unstated needs. So, these are the two ways in which business needs and consumer needs are changing.

Nitika: Great points, you talked about stated and unstated needs of the customer. When you said we have to keep our eye on the ball, are you doing this through manual intervention? Or are you leveraging technology as a baseline to help your organization in this battle against COVID?

Dipu: So, Nitika it has to be digital, and let me illustrate this with a few examples. So, when the pandemic initially occupied everybody’s minds, people were very afraid of COVID-19. They also read various reports that it can be asymptomatic and feared if they could be carriers without realizing it, and people wanted to get themselves tested. But ironically, in case you need to go to a hospital, in the quest to get tested, you could get infected. So, what we realized is, we need to come up with solutions through which customers can avail of this facility without putting themselves at risk. So, what we did was, we came up with the COVID-19 self-assessment tool on our mobile app in multiple languages. It became a great hit because now they could get themselves tested in the comfort of their homes without having to physically visit a hospital. Secondly, we understood that a lockdown can be imposed on economic activity, but you cannot prevent somebody from falling ill. So, what we realized is, we needed to come up with a digital way of ensuring that customers can continue to get unhindered access to medical care. So, we came up with a doctor-on-chat and a doctor-on-video option on our mobile app. All that customers had to do, was to log into our app and get a digital consultation done. And then, they had to go and pick up medicines, because medical shops are always open. The third thing we did, Nitika, was when social distancing picked up the pace, we realized that people have become very wary of meeting people. And they also wanted to keep a log of whom they were meeting, because contact tracing became a paramount need. So what we did was, we came out with a new feature on our app, aptly called social trackback, by which customers could basically log in their contacts on the app, and then all they needed to do in case anybody in their social circles got infected, was to go back and check their app and see if they had come in contact with anyone of them in the last 48 hours or 96 hours. And likewise, in the unfortunate event of their getting infected, they knew whom to inform. And this was before the launch of Arogya Setu. So, when you look at features like these – social trackback, doctor-on-chat, COVID-19 self-assessment tool, they could have been launched by anybody across industries. The fact that we did it, I think, was a message to our customers, that we truly care for them; in line with our motto of ‘caringly yours’. And I think our customers were extremely grateful to us for the fact that we went beyond their stated needs, and we went about meeting their latent needs.

Nitika: Very interesting points. One of the things that you talked about, obviously is, in the early stages, contact tracing, and when there was a fear of social distancing. With unlock 3.0, as people have started understanding the disease a lot more or their ability to deal with what lies ahead is a little bit clearer, because of the quantum of information that is available now, have these programs changed?

Dipu: So Nitika, if you look at the way unlock 3.0 has come into existence, there are two-three factors at work. One, of course, is the fact that customers themselves have come to terms with the new normal, they’ve accepted that COVID-19 is a way of life now. And therefore, they are taking measured and calibrated steps in terms of stepping out. Secondly, what we have done from our end is to continuously educate customers on the do’s and don’ts in the new normal, and we have continuously told our customers about the precautions that they need to take even as they go about their daily activities. Thirdly, Nitika, one thing which has come to the fore is, the fact that today people have become very wary of touch, nobody wants to press the key in the ATM, nobody wants to press the button in the elevator. So, what we have done, realizing that customer experience has to be touchless, we have actually embarked on two-three major initiatives on this front. And that’s where, you know, we have again been a little ahead of others. On one hand, when customers walk into our branches since we cannot have handshakes, we need to maintain social distancing, and since we wanted to discourage paperwork, we have basically launched barcodes – customers just need to scan these barcodes and their requirements get fulfilled – you scan a barcode, and an insurance policy can be mailed to your official email ID which you have registered with us. You scan a barcode, and you get a request for a claim. Similarly, when Alexa and Google Assistant were launched in India, we were the first ones to integrate our AI-driven chatbot with these voice-based servicing tools. So what this means is that you know, you can ask Alexa or Google Assistant for services from us. You could ask for a copy of your insurance policy, you could ask for the nearest hospital, you could ask for the nearest car workshop, you could ask for the process of raising a claim. And what we have seen is that voice-based traction has increasingly come into play.

So these three points – customers recalibrating their own expectations, as far as the new normal is concerned, the fact that we have basically entered the touchless arena, and the fact that we are focused on voice-based servicing, are areas in which the interplay of our customer focus, and customers stepping out of their cocoons, is playing itself out; and we have seen great results from this.

Nitika: Got it, those are really great points, and you talked about two aspects, which is, you said touchless, and then you also talked about voice-based servicing, and obviously technology being the underlying theme. We’ve also heard a lot about the automation component within the insurance sector as well as AI. So how is that coming into play as this crisis unfolds?

Dipu: So, if you look at AI and automation, they obviously have had key roles to play across the entire customer lifecycle. So, what we did was, basically not get into the trap of deploying technology for the sake of technology, but actually focus on the customer. So, we basically listen actively to the customer, then what we do is, take stock of the current inventory of our processes and systems. And then we re-engineer them using the principles of Lean Six Sigma so that they are reconfigured to meet customers’ needs, and then we deploy the right technology stack. And let me explain this to you, with a couple of examples. Let’s take travel insurance. Now let us assume that there is somebody from India who’s flying to the US, it’s obviously a long flight, and if the flight is delayed, then the customer is focused on one catching their next available flight, and making arrangements all over again. That’s not the time that the customer is thinking of filing a claim with their insurer, which they are eligible for, from a trip delay perspective. And even if you were to call up your insurer, typically, you would be asked for some paperwork, maybe a copy of your passport copy of your boarding pass, and some form of communication from the airline through an email or through a letter that the flight is delayed. So, we realized that the best way to help the customers is to basically make the entire process frictionless for them. So what we did was, deployed a blockchain-based solution by which we put ourselves in a situation whereby we got immutable proof that the flight was delayed. This meant that we no longer needed to ask the customers to get us any form of communication from the airline. Secondly, we made a fundamental difference to the entire insurance value chain. Typically, you need to intimate your insurance company that you are eligible for a claim, and then the insurance company will process that and make the payout to you. The difference we brought in is that, in this situation, since we knew that the flight is delayed, we did away with this need for the customer to intimate the insurance company about his/her eligibility for a claim. Now, just imagine the delight on the customers’ faces, if they are told as they go through the rigmarole of planning the bookings all over again, that, this is the amount they are eligible for, and that the amount has been transferred to their bank account. So, these are ways by which we deployed technology to make the customer experience a delight for our customers.

Now coming to artificial intelligence, Nitika, I will again give you two examples. One is our chatbot. Now today, all industries have chatbots. But where we differentiated ourselves was that our chatbot does not tell the customer in case the bot is not able to answer the customer’s query that he needs to go back to the website, or he needs to call up the call center – what we do is, we ensure a seamless transfer on the back end, from the bot to a human being, which makes it assisted automation. So, the customer doesn’t perceive any break in service. A bot is basically trained to answer FAQs, and the human being steps in under exceptional queries; what we did is that, over a period using AI and NLP, converted these exceptional queries into FAQs. And the percentage of queries answered by the bot upfront is on the rise throughout. Secondly, let’s take motor claims as an example. What happens when somebody crashes a car, you call up the insurance company, they locate the nearest Inspector, who will come inspect the car, make a report, send it to the insurance company, they’ll assess the report, arrive at the amount, and then, go through the entire process. We said, “Why don’t we make this easy for the customer? Why don’t we empower our customers?” So, what we did was, we came up with the facility on our mobile app, by which we told customers to take photographs of the car. These images will then get uploaded on our mobile app. And once it reaches us, what we do by deploying AI is that, within minutes, assess the damage and the amount, and communicate it down to the customer. And once a customer gives us consent, we transfer the money to his bank account. This entire process takes about 20 to 30 minutes. So what should take days, now happens in a matter of minutes? So, these are two examples, wherein we deployed AI from a chatbot perspective, and also from a motor claim processing perspective. If we had not deployed these tools, we wouldn’t have been able to reach these levels of customer experience.

Nitika: I mean, these are really fantastic examples. And you have used the whole breadth of digital technologies. We as consultants often talk about them, but it is really heartening to see how you have used all these different types of technologies, be it IoT, AI, Blockchain, all these fundamental technologies, to make a difference to your customers. So, I think there’s one very important question that we need to just think about before we end this podcast. This healthcare crisis really has morphed itself into a financial crisis as well. And for many insurance companies, there have been operational as well as balance sheet challenges and regulatory pressures. So what are the three things that you think that the insurance sector needs to keep an eye on, as we continue to progress and things start coming back to what we used to think of as the previous normal? What are you doing from an organizational perspective and keeping high on your priority list?

Dipu: It’s a good question, Nitika. So, if you look at the insurance industry, it basically operates on a term called combined ratio, which is essentially all the expenses that you have. So, you talk about claims and the commissions that you pay to your distributors, because insurance is the push product, and then, of course, all the other expenses. Now, one thing which people may not know, is that the combined ratio of the general insurance industry in India is 120. So, what it means is that, that the insurance industry spends around 120 rupees for every hundred rupees that they earn, which means, you’re obviously paying claims to the extent that you can pay. Now, what insurance companies need to focus on is, one, of course, on the claims process – you need to make it as smooth as possible because that is the moment of truth in the insurance industry. Insurance is the original form of crowdsourcing, you collect from many, and you pay to a few, which is why the focus on that, has got to be very high. That’s the whole reason why customers buy insurance. So, the examples I gave you in terms of blockchain for travel insurance, and AI for motor insurance, are examples which can be lighthouses for the industry – in terms of deploying technology to ramp up customer experience at scale. Now, coming to operational efficiencies, one thing which we have seen during the covid 19 pandemic phase is, digitization picked up pace. There are times when weeks happen in decades, and there are times when decades happen in weeks. I think this was one such period when the ramp-up of digitization was so massive that you had decades happen in weeks. So, what insurance companies need to do to ride on this digital wave, is to ensure we get digital at scale, given the huge market that we have, and the number of towns and cities across the whole of India, where we offer products and services. This will ensure that the costs come down, and the customer experience is ramped up as well. So one area of focus will be touchless UI/UX because it will not only ensure that you keep customers’ safety intact, but it also ensures that you’re able to digitize at scale. Secondly, and again, I’d like to give an example. One of our initiatives, which won a global award was an app that we came up with exclusively in Indian languages, for farmers, because, they take crop insurance from us. And we know that people in rural India will be more conversant in the languages that they use daily. So, this app was launched in Hindi, Kannada, and Marathi. So, the farmers can access this app in the language of their choice. And it’s an insurance company app, so, it starts off by giving them access to all Insurance Services. Secondly, farmers interact a lot with the government. So, through this app, they can also access the government’s portal. So, in a way, it becomes a one-stop-shop. And then what typically happens in agriculture markets is that they are typically characterized by information asymmetry – you don’t have large, organized pools of information. So, we give them lots of notifications on the app – we give them information about the weather because agriculture depends heavily on weather and soil, we give them information on pricing across various markets, as we’ve seen huge fluctuations in prices during this period. We also give them crop advisory and crop diagnostics. And during the pandemic, when they couldn’t step out, this just became a tool of great convenience for them, sitting in their home, using an app in the language of their convenience, they were able to interact with the government, they were able to interact with the insurance company, and they were able to get all the information that they need. The downloads went up, our app rating on the Play Store was 4.6 at one point, and then, we won a global award. What this highlights to us is that we shouldn’t fall into that classic mistake of assuming that English has to be the language of choice when it comes to ramping up digitization. We need to understand that we need to start offering services in multiple languages for us to expand our reach. Similarly, on our chatbot, I told you about the way we leverage AI to make it easy for our customers. One more thing, which we do is ensuring that there is no break in service for our customers. And also, because it’s integrated with the Google Assistant and Alexa, we have started offering our services in languages other than English, and that immediately doubles our reach. A recent report that came out a few months back, showed that the number of users of the internet in rural India has finally exceeded the number of users of the internet in urban India. So, I think, if we focus on touchless, and if we focus on multilingual, it will definitely ramp up digitization for insurance. And to the point that I earlier made, focus on claims, make it easy, ensure digital and scale, and operational efficiencies will ramp up dramatically.

Nitika: Great. Thank you so much, Dipu. I think there were a lot of insights., I was going to summarize, but I think you summarized it beautifully. You talked about digital at scale, cost efficiency with customer experience at the core, touchless UI and UX, and going multilingual. So, thank you so much. I think there is a lot that this sector has done for the end-user at this point in time, and a lot that Bajaj Allianz itself has done. So, thank you. It was a great conversation, and I look forward to connecting with you again. And thank you to our listeners for listening in to this episode.

Dipu: Thank you so much, Nitika. It was wonderful chatting with you. You asked all the right questions. And thanks to all our listeners, for listening in patiently, and I look forward to having more conversations with you going forward.

Nitika: Great. Take care. Have a good day.

Dipu: Thank you, same to you.