One of the features of digitalized industry is the omission of the middleman, as savvy customers go directly to the service. In a rapidly evolving business environment, where a shift to digital is inevitable, insurance firms must navigate through the transformation process.
According to the PwC report Insurance 2020: The digital prize, 44% of insurance leaders surveyed did not believe existing insurers would survive in their current form. Pegged at US$ 284.38 billion in 2019, with an expected annual compounded growth rate of 22.5% from 2020 to 2027, digital transformation is the new game-changer.
According to the India Brand Equity Foundation, the insurance industry in India is expected to reach US$ 280 billion in 2020. Life insurance industry in the country is expected grow by 12-15% annually for the next three-five years.
Synergy Strategic Solutions is deeply involved in developing technology solutions to address the business-specific challenges insurers face. The Tech Panda spoke to Pradeep Satya, CEO and Founder of Synergy Strategic about where India’s insurtech industry stands in its journey towards digital transformation.
Digitalization presents a growing opportunity for insurers to improve market share and profitability
“Digitalization presents a growing opportunity for insurers to improve market share and profitability. Insurers in India have started to wake up to the tremendous potential that digitization brings,” he says.
He informs that powered by cloud computing, data and predictive analytics, Robotic Process Automation (RPA) and AI/ML, savvy insurers are re-defining their product distributions and operations models. They are investing in automated underwriting, fast settlement straight through claim processes, among other functions.
“With increased competition, it is crucial that Indian insurance providers relook at their approach, putting customers at the core of their strategy,” he advises.
Technology has a huge role to play in creating integrated products and personalized customer experiences.
“As new opportunities develop, the ability to scale while delivering superior customer value will be a huge differentiator for insurers. The ones who can pull the new customers and retain the existing ones will be the winners,” he adds.
Is Indian Insurance Prepared for the Digital?
For insurers today, the digital distribution channels (including aggregators) stand at around 8-10% and is expected to increase to more than 20%-25% over the next three years. This means customers will buy either direct or thru digital channels, rather than thru agents/brokers.
Insurers spending on new age digitization and enhanced cybersecurity will be almost 30%-35% of the overall IT spend over the next two years. With Cloud computing becoming the backbone of digital transformation, and with much riding on their networks, insurers must keep errors at a minimum, reign in ever-escalating costs, update compliance policies and keep their networks always-on without compromising safety and security. They can’t depend on legacy systems.
Removing dependency on old systems should be viewed as a fundamental business tool rather than an operational and process tool
“Insurers are still hugely dependent on old systems requiring increased maintenance, which drives up cost and degrades business agility. Without doubt, insurers need to modernize timeworn core legacy systems to keep up with the heightened expectations of clients and distribution partners,” says Satya.
“While some insurers in India have already taken necessary steps to modernize specific capabilities, many are still tied to their legacy systems. It is given that merely adopting new technology or automating processes will not eliminate inefficiencies. Removing dependency on old systems should be viewed as a fundamental business tool rather than an operational and process tool,” he says.
How Digital is Insurance Getting
Digital is reshaping the insurance industry faster than ever before. As the demand by customers for bespoke experiences and digital channels are increasing, insurers are now ready to embrace the digital transformation journey at a rapid pace, says Satya.
“Till now, the insurance industry has relied heavily on complex legacy systems featuring products whose terms are difficult for customers to understand. With the new age digital reach that we are observing, there is a strong demand for product simplification and for better digital outreach. Digital tools and smart technologies are the need of the day,” he says.
With the new age digital reach that we are observing, there is a strong demand for product simplification and for better digital outreach. Digital tools and smart technologies are the need of the day
Satya calls this ‘Technology Evolution – Phase 3’, where digital assets, connected technologies and inherent core solutions will come together and provide a diversified experience to customers.
“The role of technology fillers like Robotic Process Automation (RPA) has been particularly popular in the insurance sector given its ability to automate high volume and repetitive tasks that are traditionally performed by humans,” he informs.
Synergy’s Three Value Propositions for Insurers
Headquartered in Hong Kong, with a presence in India, Malaysia and Singapore, Synergy provides end-to-end solutions like consulting services, automation services, application development services, cyber security and data analytics.
“At Synergy, our focus has consistently been on helping insurance companies leverage technology to their advantage and empower them to meet their business objectives. We work with insurers to streamline operations, automate business processes, reduce costs, and improve customer experience,” Satya explains.
They provide insurers with three key value propositions specially designed to meet the unique needs of this industry. The first is legacy modernization, where they provide solutions to upgrade legacy products, applications, and processes.
As new opportunities develop, the ability to scale while delivering superior customer value will be a huge differentiator for insurers. The ones who can pull the new customers and retain the existing ones will be the winners
The second is helping insurers provide digital solutions utilizing smart automation, rapid front-facing solutions and commercialization of data. The third is focused on data protection and cybersecurity to adhere to the evolving regulations. Their experience spans across life, health and property and casualty insurers.
The company has recently announced the launch of its award-winning ASTRA Automation Accelerator Framework for the Indian market. The framework enables insurers to leverage automation processes to quickly adapt to unexpected disruptions and enhance their operational efficiency with simple deployment processes.
Synergy first started with catering to insurers in the Hong Kong region, providing them with process and business advisory services. This has since evolved in line with client needs to include tactical technology solutions.
“My decade-long stint with a leading French insurer in the APAC region gave me deep insights about insurance operations, their inherent technology gaps, and challenges with digital adoption. I started Synergy in 2011 to address the clear dearth of partners who could work closely with insurers to solve their business and technology challenges,” Satya reminisces.
With increased competition, it is crucial that Indian insurance providers relook at their approach, putting customers at the core of their strategy
Apart from raising an initial internal seed round, the company has been able to grow on a pure bootstrap model, keeping the business nimble, boutique, sustainable, and profitable over the years.
With time, they grew operational presence in the APAC region across Hong Kong, Singapore, Japan, Malaysia, Indonesia and Philippines. So, expanding to India was a logical next step, he says.
“India is an extremely promising market. In fact, we expect half of our revenues to come from India in the next 24 months,” he says.
Their bouquet of offerings has been evolving steadily, as they explore new emerging technologies and skillsets. Throughout, their focus has been on bringing value, fresh ideas, focused delivery, and helping customers succeed on their digital journeys with ease.