With the help of technological tools, insurance companies could pivot to paying certain claims without the policyholder having to file them, insurance regulator Debasish Panda has said.
“It is time for the insurance industry to reinvent and introduce more responsive tech-led avenues to cater to the needs of over 140 crore Indians and their businesses. It is time to become future ready,” the Insurance Regulatory and Development Authority of India (IRDAI) chairman said during his address at the Global Fintech Fest in Mumbai on Wednesday.
He stressed on the need for greater adoption of technology to increase insurance penetration, reduce frauds and provide better customer service. “…smart contracts, parametric triggers and decentralised insurance would be the future… I am certain that there would be a time when even the need for filing claims will be eliminated,” he said.
This is possible through smart contracts that make extensive use of technology. “For instance, in travel insurance, a smart travel contract operating on a public blockchain will have all details of the booked flight…it would be programmed to monitor flight data continuously, triggering instant claim settlement in the case of delay or cancellation,” he said.
Likewise, if a cyclone or hurricane were to hit a region at a certain speed, the compensation would get paid based on the policy terms and conditions for people in that area with decentralised insurance.
“AI algorithms combined with machine learning models and predictive analysis will be leveraged to make underwriting an essential process in the insurance industry. Process automation will help increase the speed of traditional process that required manual intervention. Further, conversational AI will be harnessed in the insurance industry throughout the value chain and will help customers by assisting them during various stages of insurance procurement to claim process,” Panda said.
The IRDAI is also looking to boost Insurance Information Bureau (IIB) as a one-stop solution for data needs of the industry – it will provide insights, early warning signals and analytics.
All general and health insurance companies are now onboard the National Health Claims Exchange and are in the process of full integration. He also spoke about the industry-wide, regulator-backed effort to move towards 100 percent cashless claim settlements in the health insurance segment. “(Life and General Insurance) Councils are playing an active role in enabling common empanellement for hospitals and interoperability to provide seamless and frictionless claim settlement for customers,” he said.