The Insurance Leader at EY said that the idea is to move away from a traditional optimisation model to a data-rich environment managed by data scientists.
Prevention-led insurance products will be the future driver in India, rather than protection-led policies. In an interaction with Moneycontrol, Peter Manchester, EMEIA FSO Insurance Leader, EY said that adequate mining of data will enable insurers to offer such products with a competitive advantage.
"Insurers have woken up to the fact that data is the new oil. We are working on data analytics in two areas, claims and pricing. The idea is to move away from a traditional optimisation model to a data-rich environment managed by data scientists," he said.
Manchester added that insurance companies are investing on areas to optimise the pricing by using data effectively. He explained that EY is currently working with a client to build a new insurance claims platform with a data analytics layer on top of it.
"We work around predictive analysis and artificial intelligence (AI) in the area of insurance claims. We are building a technology layer with AI that can look into any claim and give directions on the next set of actions that can be taken by the claims handler," he added.
This means that while earlier claims were handled by settlement officers, now the process would be automated.
"Data analytics has a massive role to play in claims and pricing. Moving away from the regular annual renewal based plans, insurers are also offering small ticket-size plans for smaller durations like a few days or even one day," Manchester stressed.
With respect to the factors that will shape up the future of insurance, he said that economic conditions have hit the sector. He added that the nature of risks are changing and technology like AI and blockchain will shape the way insurance is bought and sold.
"For instance, fractional ownership of cars is being talked about in European countries. Here, multiple will own the car for a fixed duration. This will impact the way car insurance is sold," he added.
While insurers in India are looking to create a digital interface to the regular processes, the key will to be watch how the workforce responds to the new InsurTech environment."Insurance sales are still dependent on the manpower. How well they adapt to the technological interventions will also shape the industry," he concluded.