Key trends in insurance industry to watch out for in 2021

Authored by Dhirendra Mahyavanshi

Today, as we stand on the cusp of the new year, it is time for us to gear up for the next normal. A time to ruminate over the year gone by, assimilate our learnings from the challenges that we have faced in 2020, and carve out forward-looking strategies for 2021 and beyond. One of the things that the pandemic has brought into the spotlight is the importance of managing risk through adequate protection.

Generally, people and even businesses, tend to be more reactive rather than proactive when it comes to risk management. However, this is likely to change in the aftermath of the pandemic. People are likely to consciously move towards protections and increasingly demand customized products that adequately meet their nuanced needs. This affords the insurance industry an opportunity to play a more integral role in the life of an individual. Insurers are already adopting a future-forward attitude and creating innovative products and solutions.

Some of these include:

Bite-sized insurance or insurance in a sachet

The need for protection is now becoming ubiquitous. People are demanding insurance cover for a host of risks that were traditionally not covered by insurance companies. These could range from protection against bicycle theft and gym or fitness related injuries to protection against dengue and marathon insurance. At the same time, they would prefer to pay smaller or affordable premiums for these policies.

This birthed bite-sized insurance or insurance in a sachet. Such type of insurance is usually available digitally and is thus, is easy to purchase. This is not only meeting the nuanced needs of the consumers but is also catering to the digitally savvy generation of people.

Switch on – Switch off insurance

In today’s era of customization, it is important to provide products and services that are not only meeting the needs of the customers but also available when they need it the most. Switch on-Switch off insurance enables individuals to pay the premium only at the time they need the insurance cover. For example, in the case of vehicle insurance, a switch on-switch off insurance policy is structured in such a way that the premium is calculated on the basis of when a car is driven. If a car is not on the road then it will not be covered for accident insurance while once it is on the road it will be covered for the accident.

This will reduce the premium paid for the customer based on car usage. Making the policy more value accretive is the option to have multiple vehicles covered under one policy. This way, a single policy can meet the needs of an individual who usually switches between four-wheeler and two-wheeler vehicles.

Insurance with lifestyle benefits

Insurance is not just about receiving a lump-sum payment at the time of an unforeseen exigency. You can now take insurance cover to even protect your lifestyle on an ongoing basis. These are specific ‘lifestyle protection plans’ that can help the insured meet his/her financial liabilities and support a certain lifestyle in case of loss of income due to an insured event. Further, there are also several annuity products available that provide the insured individual a regular income in the retirement years.

Customized insurance

Then there is an innovation that is being enabled by technology like data analytics, artificial intelligence (AI), and machine learning (ML). These technologies are helping individuals effectively price insurance policies such that the premium paid for a specific policy reflects the unique risk of the individual. Let’s take the example of a health insurance policy. Wearables can help insurance companies map the lifestyle and fitness levels of an individual. This can better help them determine the risk associated with the particular individual. Consequently, healthy individuals who exercise regularly might have to pay a lower premium compared to an individual who has a high-stress job and does not exercise.

It is important to understand that this is just the tip of the iceberg in terms of product-side innovation in the insurance industry. Technology is enabling insurance companies to embed themselves deeper into the lives of individuals and thus, better understand their unique needs. Further, it is also allowing insurance companies to competitively price their products and make them digitally available to their customers. In 2021, there are two key themes that are likely to become an integral part of the insurer’s playbook. The first is optimally leveraging technology and the second is micro-level customization. While a move towards this is already underway, 2021 is likely to accelerate this transformation.

Dhirendra Mahyavanshi is Co-Founder at Turtlemint — an InsurTech Company. Views are personal

Published at Mon, 28 Dec 2020 03:22:30 +0000

Building enterprise capabilities for success in a cloud-first future

By Ramesh Chougule

In the last few years, we’ve seen significant cloud adoption beyond mainstream technology companies across diverse industry sectors. The IT ecosystem has also moved from debating the efficacy of cloud computing to strategizing enterprise digital transformation– essentially, from why to when and how.

According to a report, the global cloud services market was valued at $264.8 billion in 2019 and is projected to reach $927.51 billion by 2027, growing at a CAGR of 16.4%. The pandemic has accelerated digital transformation and cloud adoption across domains as businesses are looking to realign strategies while maintaining business continuity.

A cloud-first future

The enterprise world is moving to a cloud-first future, not only because of the evolution of core technologies but because of the transformation of businesses to meet the demands of the new-age, connected digital ecosystem. And cloud enables that transformation.

But before we dive into the cloud advantage, let’s look at how multiple businesses are evolving.

Segment of one – Today’s digital businesses need to leverage the power of insight-driven personalization to understand customer requirements and build a ‘segment of one’. This hyper-personalization, quite apparent in online retail, for example, uses predictive analysis based on large volumes of transactional and operational data. Also, the growth of e-commerce is boosted by the rapid progress of hyperlocal marketplaces for products and services and digital payments infrastructure. Enterprise are building themselves to serve the market segment of one.

Environmental sustainability is key – One of the new competitive battlegrounds for organizations to win the confidence of customers, partners, and governments is environmental sustainability. While many technology providers are committed to improving energy efficiency and lowering their carbon emissions, they are also helping customers and partners succeed with their own sustainability objectives. Technology is playing key enabling part in making the organizations carbon neutral.

Business Resilience at the center of strategy – The pandemic has brought business resilience into the centerstage. The ability of an organization to quickly adapt to disruptions while maintaining business continuity is a key focus area to be resilient to similar disruptions in future. Organizations are looking at re-evaluating and rebuilding their business models to be more resilient instead of being overpowered by it. It’s important to assess the flexibility and adaptability of the IT systems, business processes, and human resources to preserve this critical interest of being a resilient organization.

By leveraging the cloud and its ability to scale as per business requirements, modern enterprises can create robust, resilient, and environmentally conscious enterprises offering more value to employees, customers, and partners.

The cloud brings together consumer sentiments (via social media and customer feedback channels), employee sentiments (via HR platforms), as well as real-time information about all external elements such as markets, environment, logistics, global events, etc. The artificial intelligence and machine learning layer on top of this big data helps extract intelligence and actionable insights. These cloud applications allow businesses of all sizes to employ this intelligence with pre-built AI frameworks and learning models.

Building the new organizational fabric

To thrive in a cloud-first ecosystem, organizations need to build certain capabilities and transform their systems, processes, and people. Along with the organizational culture, of course.

Culture of real-time decision-making: Businesses need to prepare for real-time information flow and how that affects business processes and outcomes. They need to build processes and technologies to sense information and events, build agility and adaptability to plan and execute on the fly. This real-time information flow and intelligent decision framework changes how different roles and personas in an organization execute workflows and insight-driven decision-making. In whole, it transforms the organizational culture to operate on real-time decision frameworks.

Consuming and not building IT solutions: Since the cloud has a broadly standardized infrastructure with mainstream application layers, traditional IT departments need to evolve their mindset from building IT assets to consuming IT solutions– an identify, select, and buy approach. Instead of developing from scratch, organizations have to focus on integration of data and systems for business relevant use cases. Data, afterall, is a bigger asset now than physical IT infrastructure. The core agenda of IT departments is undergoing a significant transformation.

Focusing on business outcomes and not cloud security concerns: To the relief of most CIOs/CTOs, security seems to be a lesser concern when it comes to cloud adoption now than what it was during the early days of cloud computing. The technologies have matured since then, and the adoption of cloud in most of the industries including regulated industries as well as financial and government has improved with significant efforts by cloud service providers to allay security fears to a great degree, if not completely. So the CIOs/CTOs have started focusing more on business outcomes from cloud than engineering the secure design of cloud infrastructure.

Creating learning organizations and business-driven cloud architecture: As traditional enterprises march into the cloud-first ecosystem, they need to develop a learning organization around cloud technologies. The first aspect, of course, is about technology enablement – not just by upskilling technology professionals but also bringing cloud into business processes. These organizations need to involve business leadership to drive technology architecture to move towards a data-driven enterprise than outsourcing this to the IT department.

In nutshell, organizations will undergo significant change in their fabric as they adopt cloud technology driven business models.

Conclusion

The future of work would definitely have the cloud as the center of any organization, and hence, it is imperative for enterprises to redefine their IT and business strategy to leverage the cloud and transform into a data-driven, digital organization.

Digital transformation is not just a buzzword or IT jargon but a necessity to build sentient, responsive, and resilient businesses of the future driven by a cloud-enabledworkforce. The success of any such transformation is dependent not on the tools but on the strategy that can steer towards a demonstrable business value.

The author is AVP – SAP Cloud and Digital Lead, Infosys
DISCLAIMER: The views expressed are solely of the author and ETCIO.com does not necessarily subscribe to it. ETCIO.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.

Published at Mon, 28 Dec 2020 03:22:30 +0000