In India, it is necessary to take motor insurance under the Motor Vehicles Act of 1988. The increasing cases of road accidents, the number of cars getting damaged have forced people to opt for motor insurance to protect their vehicles. According to ICRA, the general insurance industry is expected to grow by 7% to 9% in gross direct premium income during FY22. In FY21, the industry grew at 4% per annum and stood at Rs.1.85 lakh crore.
Advances in technology have also brought about a significant change in motor insurance and these gradual changes will continue in the years to come. Today’s customers are more aware of insurance than ever before and are also mature about their needs. They are on the lookout for more personalized services which motivates the insurers to offer more customized plans.
With the changing customer needs and behaviour are driven by the industry environment and advancements in technology, insurers strive to provide customized products in the easiest possible manner.
Keeping this in mind, motor insurance consumers have recently brought some special changes which will continue in 2022 also, know what are those important industry trends:
Artificial Intelligence (AI)
Advance technologies have completely changed the field of information systems, making it even easier for insurance consumers to use. With AI/ML driven solutions for claim detection, automated claim fraud detection with rich data analysis, claim volume estimation and loss analysis automated, insurers can improve claim management have been successful. In addition, due to the large population and availability of digital data, insurers are able to better understand the needs of human beings.
Machine learning can help automate claim processing. Files accessible digitally and through the cloud can be analyzed even more precisely with the help of pre-programmed algorithms. This review can be used for policy administration and risk assessment.
Telematics are wearable technologies in the car. This allows monitoring of parameters like speed, location and accident. This data is further processed by analytics which decides the policy premium. Telematics encourages drivers with better driving skills to lower claim costs for insurers.
It is estimated that by 2025, most of the discussion will be driven by the power of chatbots. With the help of Chatbots, communication will be simplified and this will save time/inside the organization. A chatbot can communicate policy-related information, procedures and avoid human intervention to the customer.
The demand for Electric Vehicles (EVs) in India is gradually increasing. Besides being a more sustainable option than petrol and diesel vehicles, they will be more economical in the long run. With incentives likely to be offered on the purchase of EVs, this segment is expected to grow.
These technological advances will give shape and momentum to the motor insurance industry. Implementing an emerging technology is a top-down exercise for the industry and the introduction of a regulatory sandbox indicates the government’s approach to digitization as the future of the sector.
The author – Home & Motor Underwriting is the Head of SBI General Insurance, views are his persona