Digital Technology Is Transforming The Insurance Industry

(MENAFN- Khaleej Times) Published: Fri 10 Mar 2023, 9:12 AM

Gargash Insurance is witnessing a robust year-on-year growth in business through its online channels, said Suresh Nair, executive director, Gargash Insurance Services. The firm is registering about 150-200 per cent rise in premium through online sales, a trend that is generally reflective of the industry at large where players using insurtech are increasingly making deeper inroads.

Insurtech is also helping transform traditional brokers and insurance companies and shoring up sales online.

‘Digital technology is transforming the insurance industry in ways that are benefiting all the major stakeholders the consumers, insurance companies, and the brokers. At Gargash, we have seen a three-digit growth in business year-on-year through online channels in the last two years. Even allowing for a relatively smaller base, it is still suggestive of the changing consumer behavior and acceptance of technology backed initiatives,’ said Nair.

Insurtech refers to technological innovations that are created and implemented to improve the efficiency of the insurance industry. The global insurtech market size was valued at $5.45 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 52.7 per cent from 2023 to 2030, as per industry reports.

Scattered and siloed data, however, is among the biggest hindrances to the evolution of insurtech in the region. ‘Insurance is reliant on data and insurers have huge amounts of data sitting in vertical silos not talking to each other. Currently, there is limited sharing and strategic use of data among, say, claims, underwriting and accounts departments of insurance companies. Once we start leveraging the power of big data, AI, blockchain etc., we should start to see a huge difference. At the moment, many insurance companies, having recognised the power of insurtech, are addressing legacy issues with their operating and data structures that hinder them from adopting technology and utilising it to its full potential.’

In the UAE, insurtech is most visible on online aggregator models deployed by insurance brokers licensed by the Central Bank of the UAE. This is in contrast with some other global markets where there has been a dramatic rise of standalone specialized insurtech focused insurance companies in the past few years and these firms are competing head-to-head with traditional players, offering more finely priced products.

Asked how Gargash Insurance is geared to compete with insurtech firms, Nair said: ‘Gargash Insurance are traditional brokers only in the sense that we started almost three decades back in the pre-internet era. Otherwise, we have been ahead of the curve in adapting to new technology. For instance, we were the first to offer online payment options to customers in the early 2000s. In more recent times, we have looked at chatbots, RPA’s, end-to-end digital distribution etc with success and are constantly trying to increase our value proposition to customers.’

Nair further noted that Insurtech can make it possible to eventually offer better tailored and priced products for requirements of customers. ‘With insurtech, insurance companies are already able to offer products to customers based on their credentials and usage. Motor and home insurance, initially, can be personalised with maturing insurtech. Such developments and benefits will be possible in better ways and many more areas with wider adoption of technology.’ The local insurance market has an ideal platform as the UAE is recognised as the regional leader in digitisation and has already rolled out 5G cellular network. ‘We need a multipronged approach in this industry. There are many facets of technology that can be adopted by companies to truly assimilate the positives of technology. RPA (robotic process automation), for example, can do one day’s work of seven to eight people in a matter of a few seconds, thus releasing human resources to be redeployed in more useful areas. Such technologies would translate into operational efficiencies, cost efficiencies, and maximise customer engagement and satisfaction. Once these technologies converge and we get a flywheel effect, we will see huge change in the industry, and it could be just round the corner,’ Nair noted.

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