Physical Insurance Distribution Still Essential in India

Published By: Mint ​

Published Date: 28-08-2017

Despite the growing impact of technology on insurance sales and services, physical distribution remains crucial in India's insurance landscape. In an interview with Mint Money, Rakesh Jain, CEO of Reliance General Insurance, highlighted that while digital transformation is advancing, insurance remains largely a ""push product"" in India, necessitating a blended ""phygital"" approach.

The insurance industry in India faces significant challenges, primarily the lack of adequate awareness about insurance products, resulting in an under-penetrated market. Many vehicles operate without mandatory coverage and health insurance adoption remains even lower. This reflects both awareness issues and poor compliance implementation.

Technology is creating mutual benefits for insurers and consumers. Wearables collect health data for better risk profiling, potentially allowing for adjusted premiums. Insurers are leveraging insure-tech to deliver simplified services to younger consumers through mobility platforms, video streaming, IoT, big data and artificial intelligence.

Health insurance is evolving from therapeutic to preventive care, with insurers using data to advise customers on potential health risks and healthier lifestyles. In motor insurance, technology helps predict risks through data analytics and reduces claim settlement time.

However, fraudulent claims remain a significant industry challenge, with exaggerated claim amounts and fake accidents being common issues. Companies are investing in customer profiling and advanced analytics to identify fraud patterns.

As Reliance General Insurance prepares to go public, Jain notes this will bring increased transparency through additional regulatory requirements and accountability to shareholders. While digital distribution works well for tailored products aimed at tech-savvy customers, the Indian market still requires traditional distribution channels for mainstream insurance products.