Since November 2022, when the Insurance Regulatory and Development Authority of India (IRDAI) announced its ambitious national vision to provide ‘Insurance for All’ by 2047, the government body has taken aggressive steps to ease regulatory, capital, and social barriers to consumer adoption of life and health insurance services. Some notable changes include: 

• Repeal of ~70 outdated regulations. 

• Removal of ~1000 circulars (making the regulations less complex by reducing official communications). 

• Simplifying financial, operational, and compliance reporting requirements. 

Considering that the population of India is projected to reach 1.7 billion by 2047, the challenges of policy distribution across the country – especially in rural regions – will be monumental in the coming two decades. Insurers’ capacity to automate and scale underwriting processes will be mission-critical.  

ICICI Bank notes that life insurance has traditionally been a low priority for Indian consumers who had limited understanding of its benefits, did not understand the risk of insufficient coverage and believed it to be too expensive.  

However, risk awareness grew during the COVID-19 pandemic, and younger and more digitally savvy consumers with a growing preference for purchasing goods and services online have contributed to significant increases in life insurance interest, literacy, and adoption. 

Mayank Gupta, chief operations officer at insurtech platform, Zopper explained in The Economic Times, “Since the pandemic made the contactless system a necessity, customers became increasingly comfortable with purchasing things digitally, including complicated financial assets and even insurance plans. Understandably, new and more tech-savvy customers will naturally be drawn to those with the finest digital offering". 

According to Boston Consulting Group’s (BCG) September 2023 white paper India Insurtech Landscape and Trends − Driving Towards Insurance for All, core themes that will drive the Indian initiative are: 

• Awareness − product simplification, targeted customer communication and last mile activation. 

• Product offering and affordability − innovative constructs, simplification.  

• Strengthened distribution − last-mile reach, improved productivity, new channels.  

• Enhanced customer experience and trust − seamless journeys, personalisation, transparency. 

• Regulatory enablers. 

With the IRDAI removing barriers, insurers and insurtech have an unprecedented opportunity in the Indian market to partner on highly scalable insurance delivery systems and methodology, delivering on the goal of Insurance for All.  

According to IRDAI Chairperson Debasish Panda, “Technology adoption is changing the insurance landscape in the country. The use of big data, AI (artificial intelligence), ML (machine learning) are impacting the sector in more ways than one. IRDAI is encouraging insurtech, regtech, and fintech to provide ease of [access to] insurance”. 

Additionally, the vast reliance on and proliferation of mobile phone usage in India, now driven by lower-cost 5G adoption (especially in rural areas), will accelerate insurance penetration across India. According to International Data Corporation India, 5G smartphone share increased to 47% in Q2 2023, up from 31% in Q2 2022.

Risk awareness

The Indian market has seen a sharp increase in insurance fraud. Tobias Frenz, CEO Munich Re Singapore, observes, “Fraud comes in many shapes, from producing forged documents, manipulating pre-policy health check-up records, non-disclosure of critical information, buying of policies in the name of a deceased person or a person with a terminal illness, stating false reasons for claims, staged accidents, etc. Fraud is certainly not unique to India but has been more pronounced there in the recent past". 

Deloitte’s Insurance Fraud Survey 2023 found that, “60 percent of survey respondents felt there was significant rise in fraud, while a further 10 per cent reported a slight increase. Insurers consider mitigating fraud as a priority. Key factors given for the rise include increased digitisation (34 per cent), remote working (22 per cent) post pandemic and weakened controls (22 per cent)”.  

Across the industry, insurers are facing challenges including data quality, data protection and privacy, and lack of analytical tools to assess and mitigate risks. 

Customer focus

Without careful response to consumer needs – among them personalisation, automation and accessibility of both information and processes, insurers risk alienating Indian consumers. 

According to BFSI from The Economic Times, “To unlock [the] higher potential of the insurance sector, the industry needs to leverage technology within the organisation and customer interactions…align with dynamic changes in customer behaviour and preferences and manage perceptions by showcasing fiduciary responsibility, like offering quick personalised products…over mass-product offerings to give customers more flexibility. 

“There's an urgent need to optimise usage of data and analytics across functions for maximum efficiency, especially in the case of underwriting and claims”.  

BCG’s India Insurtech Landscape and Trends analysis includes these factors and themes as critical to penetration and distribution in the India market: 

• Increasing importance of customer experience.  

• Data and analytics emerging as a core capability to drive operational efficiencies and enhance pricing proposition.  

• Emergence of the National Health Stack. 

Build vs buy

Many insurers have already tried to build internal digitalisation systems, only to find they are too cumbersome for underwriters and back-of-house teams to use correctly or effectively. Lack of internal usability is a chief factor in the failure of in-house digitalisation solutions. 

Some insurers are at an inflection point of determining whether to build or buy. Yet the internal resources required to replace or improve legacy systems can hinder businesses forging a path toward digitalisation. 

In addition to internal change management and alignment, and training of existing and incoming talent, replacement or augmentation of legacy systems requires investment in technology infrastructure and continuous maintenance and optimisation. Partnering with vendors who specialise in insurance industry digitalisation provides the tools required to accelerate digitalisation. 

If you are interested in accelerating your race towards insurance for all, expand the sections below to discover how we can work together to digitally transform your business.

Evolution, not revolution

Despite India’s push towards Insurance for All by 2047, change cannot, and indeed should not, happen overnight. Insurers who digitalise too early or late, or in the wrong way, run risks which could negatively impact their profitability, data security, brand and reputation.  

Munich Re Automation Solutions offers a plethora of ‘building block’ modular solutions to drive digital transformation in the Indian insurance space. In fact, for over 30 years, we have been transforming insurance organisations with next generation digital insurance solutions; we are currently trusted by more than 140 global insurers. 

We possess the business expertise, risk knowledge and subject matter experts you need to accelerate adoption of next generation underwriting models. We provide scalable automation and digitalisation solutions, robust regulatory oversight, analysis tools, the latest technologies, and the highest quality compliance and security landscape of any digital solutions provider.   

You can put this digitalisation power to work for your business at every stage of the value chain. Munich Re Automation Solutions is here to support your end-to-end digital transformation, and act as a trusted partner and champion of India’s Insurance for All initiative.