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Indian insurance companies are lagging their global counterparts in increasing investment in digital technologies and will need to adopt technology required to launch products that meet customer needs, a study by industry chamber CII said on Sunday.
"Global average investment in digital technologies is increasing over the years, while the insurance industry in India is lagging, both in its level of digitalisation and its ability to realise financial returns on its digital investments," said a joint CII-PricewaterhouseCoopers (PwC) report.
The report on "Evolving Considerations for the Indian Insurance Industry" also said that with increasing smartphone penetration and internet access, insurance companies will need to adapt to the modern customer needs by adopting the new technological infrastructure.
"Insurers must adapt to new-age customers' needs, leverage on the explosion of data and digital footprint and the changing investment environment," the Confederation of Indian Industry (CII) said in a release here.
"Mobile adoption and internet trends under Digital India banner are bringing in a new generation of customers who are conversant and comfortable with using technology for their financial decisions.
"It is important to adapt to strategies that align with these changing trends to stay ahead of the competition," it added.
Leveraging low-cost digital distribution channels for sales and service is likely to play a significant role in helping insurance companies deepen market penetration, the report said.
Moreover, simplification of processes will also lead to some degree of uniformity in the expectations of customers.
"There needs be a simplification of products in the areas of policy benefit, the wording of the policy, application process and the claim process," CII said.
"The insurers could focus on 'One Need One Product' scenario, where customers are provided simplified products that cater to their specific needs," it added.
The report also said that with digitalisation, insurance companies should be wary of new methods of fraud.
It stresses on three key areas relevant to the insurance sector — simple products and low-cost distribution, digitisation and fraud management, and broadening the investment horizon.