Table of Contents
01    Conversational CX: Tops Tactical Investments in 2021
02   The Insurance Monthly Roundup
03   The Missing Middle of India’s Health Insured
04   Key Insights from Polizybazaar’s IPO
05   Q3 2021 Insurtech Landscape Activity

Conversational CX: Tops Tactical Investments in 2021

Conversational CX leads the pack among ‘tactical investment strategies’ for Insurers. Cyber/Data Security and Agile Cloud Computing are the other resilience-focused transformations. Conversational CX touches all parts of digital insurance journeys. It extends across the entire value chain, not just the upfront sales and onboarding process. The conversational commerce ecosystem is driven by Chatbots, Smart Speakers/Digital Voice Assistants, Social Messengers and RCS Messaging platforms (an upgraded form of SMS with rich multimedia capabilities & features).  

With an addressable user base of nearly 2.3 billion in 2021, chatbot commerce is the fastest growing segment, according to Juniper research. The ability to offer conversational commerce as part of an omnichannel strategy will propel insurance organizations to expand their reach and boost channel confidence

According to Mantra Labs latest report ‘Elevating Conversational CX in Insurance’ — Only 35% of insurance executives actively prioritize retaining customers as more important than new business. Research shows customer retention is at least four times as cost-efficient as pursuing new business. 

Source: Mantra Labs Whitepaper

Carriers who prioritized CX before the pandemic have already gained an early advantage. Mature CX organizations are more than six times as likely to exceed their customer retention goals. Investments in digital front-office transformation would better align Carriers with their customers’ engagement needs and improve cost efficiency.

Elevating Conversational CX In Insurance

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The Insurance Monthly Roundup

A quick roundup of the month’s insurance and insurtech news.

(India)

1. The Mother of All IPOs — India is seeking a valuation of at least $109 billion for state-backed Life Insurance Corp — likely to be at the end of the financial year, meaning it could “drain liquidity and impact the secondary market to some extent.
2. Pune-based DigiSafe — an Indian insurtech broker for rural insurance is set to launch across India bringing simplified insurance products across motor, health, livestock, crop and life to the customer’s doorstep.
3. The average payable premium by a 26-year-old across categories was ₹16,695 for ₹10 lakh sum insured, and ₹13,140 for a ₹5 lakh sum insured
4. Xiaomi Corp. is looking to provide the full spectrum of financial services across payments, lending and insurance in India, The offerings will include gold loans, credit line cards and insurance products through partner banks and platforms.
5. Insurtech startup GramCover raises $7 million in a Series A round to strengthen the technology and product offerings and also scale up the business and support functions.

(Global)

1. The Global Life Insurance market is expected to grow from $2.8 billion in 2020 to $3.5 billion in 2025 at a rate of 4.4% due to investing in life insurance policies to protect against increase in chronic illnesses. The market is expected to grow to $4.2 billion in 2030 at a CAGR of 3.7%.
2. Global investment in insurance technology (insurtech) start-ups totalled $10.5 billion in the first nine months of 2021, a record high level for the period, according to reinsurance broker Willis Re.
3. The Global Insurtech Market is expected to Garner $158.9 Bn by 2030 growing at 32.7% CAGR, according to Allied Market Research.
4. Sunday, a full stack insurtech startup based in Bangkok, has raised a $45 million Series B from investors including Tencent to enhance areas from underwriting to distribution of its policies.
5. Blueprint Title, an insurtech startup working in the title insurance space, closed a $16 million Series B to enhance offerings and  to shrink the title insurance market through more reasonable pricing.

Delivering Superior Customer Experiences over Video.
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The Missing Middle of India’s Health Insured

According to the NITI AAYOG’s Report, 2021 – the ‘missing middle’ is a broad category which lacks health insurance, positioned between the deprived poorer sections, and the relatively well-off organized sector. The deprived and poor sections receive Government subsidized health insurance, while the relatively well-off in the organized sector of the economy are covered under social health insurance, or private voluntary insurance. 

Number of Individuals either eligible or covered by health insurance

Source: NITI AAYOG Report 2021

The missing middle refers to the non-poor segments of the population who remain prone to catastrophic, and even impoverishing health expenditure, despite the financial capacity to pay for contributory health insurance.

Missing Middle – Uncovered Population

Source: NITI AAYOG Report 2021

This segment constitutes the self-employed (agriculture and non-agriculture) in rural areas, and a broad array of occupations – informal, semi-formal, and formal – in urban areas. Self-employed in agriculture constitutes the largest segment of the rural ‘missing middle’ with approximately 40% to 60% of the households.They are followed by the self- employed in non agriculture, constituting around 20% of all households. In urban areas, approximately 45% to 70% of households are engaged in managerial, professional, or technical occupations.

The category of ‘managers, senior officials, and legislators’ constitutes the largest urban missing middle occupation segment with 25% to 45% of all households. Under the second methodology, over 50% of the urban missing middle households are engaged as service or shop sales workers, craft & related trades workers (e.g., painters, welders), plant machinery operators & assemblers (e.g., glass or paper-making plant operators), and other elementary occupations (e.g., manufacturing labour, domestic workers)

Missing Middle – Primary Occupation

Source: NITI AAYOG Report 2021

The report looks at three developing countries / regions — Thailand, China, and Latin America that have adopted different models to increase health insurance coverage. Some have increased insurance coverage though expansion of Government subsidized schemes while others have focused on developing robust voluntary coverage programs. 

Thailand achieved UHC by fully subsidizing the informal sector while China has partially subsidized that segment. However, China’s experience indicates the possibility of sustained coverage through a contributory and voluntary scheme. The examples from Latin America highlight that adverse selection and inadequate risk-pooling is a pressing challenge for voluntary contributory schemes targeted towards the informal sector. Read more from the report here.

A Tech-Enabled World for Future Pandemic Phases
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Key Insights from Policybazaar’s IPO 

Here’s all you need to know about Policybazaar’s maiden public offering:

1. PB Fintech owns two brands – Policybazaar (68.5% of FY21 revenues) and Paisabazaar (31.5% of revenues). As per an F&S report, it is India’s largest digital-insurance platform, accounting for 65.3% of all digital-insurance sales in India by volume in FY20.
2. PB Fintech has built India’s largest online platform for insurance (Policybazaar) and lending products (Paisabazaar) leveraging the power of technology, data and innovation. It provides convenient access to insurance, credit and other financial products and aims to create awareness amongst Indian households about the financial impact of death, disease and damage.
3. In FY20, Policybazaar was India’s largest digital insurance marketplace among all online insurance distributors with 93.4% market share based on number of policies sold, and constituted 65.3% of all digital insurance sales in India by number of policies sold (including online sales done directly by insurance companies and by insurance distributors).
4. PB Fintech, which has an asset-light capital strategy, launched Paisabazaar in 2014 to provide lending products (personal loans and credit cards). It was India’s largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in FY21. Paisabazaar is also widely used to access credit scores, with approximately 22.5 million consumers cumulatively having accessed their credit score through the platform as of June 2021.
5. The company primarily generates revenues from commission and additional services, and from providing online marketing, consulting and technology services to insurer and lending partners.
6. The company is planning to raise ₹5,700 crore through its IPO that comprises a fresh issue of ₹3,750 crore and an offer for sale of ₹1,960 crore. The company will utilise net proceeds from fresh issue for enhancing visibility and awareness of its brands (Policybazaar and Paisabazaar) (₹1,500 crore), new opportunities to expand consumer base including offline presence (₹375 crore), strategic investments and acquisitions (₹600 crore), and expanding presence outside India (₹375 crore), besides general corporate purposes.
7. In FY21, 83% of the policies sold on Policybazaar and 66% of loans originated on Paisabazaar were by consumers who came to the company’s platform directly or through direct online brand searches.

Conversational Intelligence: The Next Big Thing In Customer Experience

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Q3 2021 Insurtech Landscape Activity

Although global insurtech funding has dropped 35% from the previous quarter’s record peak to $3.1B across 113 deals, insurtechs have raised a whopping $10.5B across 427 deals in 2021 so far. It reached $7.38 billion in H1—fueled in part by insurers looking to boost their digital capabilities.

• As cybersecurity continues to be a major challenge for businesses of all sizes, 2 of the top 3 largest deals this quarter went to startups building cyber insurance and risk management solutions.
• These startups include Coalition, which raised a $205M Series E, and At-Bay, which raised a $185M Series D. Companies deploy a variety of models to approach cyber insurance, including tech-enabled managing general agents (MGAs) for underwriting and risk analytics providers.
• In H1 2021, if we were to spread the investment total equally over the number of days in this time period, on average $40 million was invested into InsurTechs (globally) per day.
• Indonesia, Sweden, South Africa, Singapore, the U.A.E., and others all saw QoQ increases in deal activity as insurtech continues to scale across the globe.
• Q3 2021 is notably the second-largest quarterly funding figure on record. Early-stage average deal size grows to nearly $12M, up 90% compared to Q2’21: Early-stage startups raised a record-breaking $630M in Q3.
• On average, since the beginning of 2017, approximately 6.5 times more investment is occurring on a current quarterly basis into InsurTechs across the globe. Early-stage average deal sizes grow to nearly $12 million, up 90% compared with Q2 2021.

CX Trends 2021: How Businesses are Winning Customer Experience Moments
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