Introduction of latest technology in the insurance sector is very important. When the economy is going forward, the issue of risk protection comes up simultaneously. Most of the developed countries have done this during their economic growth. Insurance safeguards individuals, households and companies against numerous risks, and it also reduces the financial burden on the government and, therefore, it creates a stable environment in which businesses can thrive for the potential economic success. Several trends show promise for upraising the insurance industry in Bangladesh. Customer demand is at an all-time high amid the continuing technological change. Indeed, the post-Covid-19 scene has only reemphasized the need for insurance protection with the support of digitalisation.
Insurtech, a combination of the words 'insurance' and 'technology', refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model. Bangladesh, which has one of the lowest insurance penetrations in the world, is missing out on tapping the potential of the insurance sector using technologies for a lack of recognition of Insurtech by various stakeholders.
Now we can take the advantage of technology and the changing Business Process and the companies can set a milestone in growth of insurance. The pre-assessments for setting the milestones are:
• Development of IT infrastructure / Adoption of new IT system;
• Prepare one-stop Digital Platform / Apps / Customized Web-page Solution;
• Digital Sales / Enrollment of Insurances Plans;
• Digital Risk Assessment / Underwriting;
• Digital Serving and Claim Submission;
• Digital Settlement and Payment through Digital Channels/BFTN (Online Fund Transfer);
• Digital marketing strategy and training development for the agents/financial associates;
Investopedia explains that Insurtech plays an important part in changing how coverage is applied and paid for in a number of ways:
• Insurtech enhances the customer experience. By leveraging technology, customers are more engaged in selecting their coverage, understanding their needs, and getting personalized service. Instead of having to travel to a branch or speak to a representative, the future of insurtech is moving towards self-service, online dealings where customers have their choice of engagement channel.
• Insurtech promotes efficiency. Policy-seekers and policy-holders can often research and explore options using the internet and apps. Without having to wait for business hours or an available representative, many insurtech companies empower users to quickly access the information they need without being bogged down in processes.
• Insurtech emphasizes individuality. Due to the innovative nature of information gathering and data processing, many new tools (discussed below) are now available to better understand each individual's true needs. This not only improves pricing but delivers more reliable, consistent coverage based on historical data.
• Insurtech improves flexibility. Modern insurtech offerings are more likely to have flexible, customized, short-term, or transferrable plans. Instead of needing to lock into long-term arrangements, insurtech is more likely to give individuals specific coverage for a specific need over a specific duration.
• Insurtech reduces operating costs. Traditional insurance companies relied on brick-and-mortar locations that necessitated manual labour. Now, insurtech companies can operate remotely with staff engaging with customers around the world.
• Insurtech may decrease fraud. By leveraging data, analytics, trend analysis, and machine learning, insurtech companies may be able to detect fraudulent activities, if inconsistency in data arises. In addition, big data may also be able to discover potential loopholes that insurers can seek to close to avoid exploitation.
Now-a-days technology inclusion by the insurers has made the claim settlement easier and more accurate than before. Since the claim settlement is the number one priority for most insurers, we can expect to see continued advancement as insurers find innovative ways to integrate technology into their claim settlement process. Digitalization is enabling the spread of on-demand tailored insurance as well. Individuals can now purchase personalized coverage for specific durations and items in real time. Customers cover what they want, when they want and length of the coverage they want. With the use of Artificial Intelligence (AI) software, insurers can automate many aspects of the insurance process, including risks assessment underwriting, fraud identification, and underwriting. AI also enables insurers to access data faster and cutting out the human element can lead to more accurate reporting in shorter periods of time.
Introduction of payment gateway channels is very important. Any insured can easily pay their premium through digital payment gateways such as MFS (mobile wallets) as well as insurance company's website and mobile apps by using their bank cards. When it comes to online claims submission, any insured/beneficiary can also submit their claims through the company's claim portal. The beneficiary can track their real time claim status (including partial maturity) through an insurance company's website and mobile app. On the other hand, it is important to build strong digital infrastructure, including data centres, cloud computing, and artificial intelligence. The government is working to establish data centres and cloud computing facilities in the country, as well as promoting the use of artificial intelligence in various sectors. Insurance companies must move fast to adopt and incorporate these digital infrastructure facilities for ensuring countrywide insurance protection resulting in better services and creating trust among their beneficiaries.
The economy of Bangladesh is rapidly shifting from agricultural to the services sector. Insurance is one of the elements of the financial services industry and it can play a big role, if it is promoted properly. In recent years, both the regulator and the government have taken several encouraging initiatives to earn confidence and create awareness about insurance among the population since the celebration of first National Insurance Day on March 01, 2020, which paved the way for all the insurance providers and the regulator to join in bringing more people under the protection of insurance.
S M Ziaul Hoque, FLMI, is CEO of Chartered Life Insurance Company Ltd.
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