What does digitization of insurance mean for the customer?

In 2019, our company decided to focus on digital enablement. Going digital is often mistaken for a direct customer approach. But for us, digital means being part of an ecosystem where all the different players join hands to make the whole process smooth and cohesive for the customer. If a company builds a website and starts selling online, it will cater to a very specific customer. But if all processes are enabled digitally, it could help bring in more distributors and cater to a larger universe.


Some salesmen have tablets which they use to fill out forms and submit documents.

This is not complete digitisation. It simply converts the paperwork into a paperless process. The customer will still have to upload the scanned copies of the documents along with the application. Anyone in the backend will go through those scanned images and verify the application to proceed. So, while the process moved away from paper, it did not go completely digital. We are working on going digital along with data. This process will not require any documents and will make the journey faster and easier for the buyer.

So how will it work?

As I said earlier, it is not a single player working alone, but the whole ecosystem working in tandem. The insurance buyer will be identified digitally, the screening (or underwriting) will be done digitally, and the confirmation will also be digital. We need an ecosystem that supports these processes, an ecosystem where a company can interact on a real-time basis. on the basis of integration, we can say that we do not require any paperwork and can reduce the whole process to a single conversation. If one applies for life insurance today, it usually takes 15-45 days for the policy to be issued. We plan to issue the policy the next day.

We start with the PAN of the buyer. If he has PAN and CKYC (Central Know Your Customer) is also registered, then we do not need anything else. More than 75% of our buyers are CKYC registered. In case the buyer is not CKYC registered, we give them the option to provide their Aadhaar or Driving License. Almost everyone will have these documents to help identify them.

Apart from speeding up the process, are there any other benefits of going digital?

The biggest concern of an insurance company is fraud. Just one fraudulent claim can change the game for the insurance company as the sum assured is anywhere in the range of 500-700 times. annual premium, There are cartels that buy life insurance in the name of seriously ill or deceased people. They submit forged documents to buy insurance and then claim after a few years. Because of such people, like any airport where everyone goes through screening only to weed out a few miscreants, insurance companies have to tighten up the screening process to avoid fraudsters buying insurance from them. If the ecosystem is well integrated and shares data from different sources, it can reduce the incidents of fraud to a great extent.


Life insurance moves towards digital even after so many years, improve it?

Life insurance is less accessible in India as it is very difficult to discuss the possibility of death with an individual. So, while almost everyone knows what insurance means, very few understand the need for it. People don’t even want to think that they will die. And term insurance premium is treated as an expense. This is why the savings and investment components are mainly combined into a risk mitigation tool.

The urgency to buy insurance can come only when the insurance company can give the right message to the individual at the right time. Data is the mind, and digital is the medium of how I can reach the customer. Going digital can add more distributors who may not necessarily be selling insurance right now. It is easier to tie up with financial services companies like banks and NBFCs as the service is more related. But we can also partner with other industries like e-commerce companies to sell insurance. This is one way to increase the penetration of insurance. During the first wave of COVID, we tied up with Flipkart to offer an insurance policy that covered the cost of treatment for COVID. The product performed very well as it met the actual requirement at the right time.

What is special about Aegon Life’s new term plan?

Term plans are beneficial to cover the risk of premature death. They are especially necessary for those who have just started earning and have not accumulated enough money yet. A person can buy life insurance till the age of 65-70 years. But in parallel, the person begins to save and accumulate wealth. If a person builds enough wealth and meets all his life goals while he is in his fifties, he may no longer need life insurance. Why continue paying premiums for something they don’t need? Our new plan gives an option to the policyholder to discontinue the plan at the age of 54-55 years. If the policyholder decides to discontinue the plan at the age of 54-55 years, the entire premium paid till then is refunded. Hence, it gives the policyholder unparalleled flexibility to terminate the plan without losing the past premiums and saving on future premiums.