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India InsurTech Thought Leadership

Thought Leadership Article By Dr. C H Asrani Founder & Chairman

Thought Leadership Article By Dr. C H Asrani Founder & Chairman

What is preferable – insurers developing their own products or using products made for them by external agencies?

a. An approach that has proved effective in more mature global markets is the “Hybrid Model” which can be developed and operationalized. The Hybrid Model could have “InsureTech Partners with domain capabilities”. With this model, the source code and IP of core areas are retained while some of the elements of the Development Life Cycle are managed by the external partners b. Insurers in the future need to evolve a more “Flexible Pricing Model” which will help them to control the outcomes, quality, and costs while dealing with their Insure Tech partners c. From a control perspective for the Insurers, there are multiple options to manage a partner. These decisions are normally based on the size & sensitivity of the project on hand. An equity stake in the partner’s organizations has proved to be effective and gives the Insurance companies deep engagement to manage performance and priorities.

n conclusion, the hybrid model has proved to be ideal for new insurers. As the scale of operations is larger in the more mature insurers, a strategic partnership with Insuretech partners will help them to leverage their dominance.

How far insurtech has helped control fraud?

In Insurance, pricing and claim servicing have a great impact on an Insurance Company’s bottom line. In fact, in the last two decades claim cost has had a direct bearing on the pricing as we have witnessed a sharp rise in premia – much more than just to match inflation. Leakages and frauds on account of claim/underwriting adversely affect the claim experience, which in turn has started affecting the pricing. Industry experts believe that this is not due to the poor pricing of the product! But largely due to fraud and abuse!! Once the suspicious 20-25% proposals/ claims are shortlisted, comes the true test – updated medical insights pertaining to ‘THE’ proposal/ claim at hand. The professional who is auditing should have easy access to updated interpretation of medical tests as well as Standard Treatment Guidelines (STGs) and need to evaluate the proposal/ claim against the background of the specific policy terms and conditions with medical knowledge. The analytics using over 50 outliers (clinical and non-clinical) scores a claim and 15-25% of the flagged claims are manually audited on the STG- based claim engine – picking up 28-35% of shortlisted ones turning either non-payable/ partly payable.

Author: Thought Leadership Article By Dr. C H Asrani Founder & Chairman

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of IIA and IIA does not assume any responsibility or liability for the same.

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