Insurance for all: Building resilience to thrive in digital ecosystems

The IRDAI’s ambitious vision of “Insurance for all by 2047” requires insurers to provide diverse offerings across all target segments. Join Mangesh Vaitla as he dissects these objectives and details how Indian Insurers can stay ahead of the curve.

The IRDAI’s ambitious vision of “Insurance for all by 2047” requires insurers to provide diverse offerings across all target segments.

Today, initiatives like the India Stack and JAM (Jan Dhan Yojana, Aadhar, and Mobile) have been strengthened with IRDAI’s investments like Bima Sugam. In conjunction with ONDC (Open Network for Digital Commerce), PHR (Personal Health Record), and AA (Account Aggregators), these will help create industry standards. It will benefit commoditised offerings and standardise Insurtech microservices from the ecosystem players.

From an insurer’s perspective, the proposed Insurance ecosystem requires a heterogenous market with: 

  1. Products designed for different risks 
  2. Innovative distribution and business models
  3. Fulfilment (sales and servicing) via emerging ecosystems  

The Indian government’s vision provides innovative growth opportunities across product, distribution, and operational dimensions. Insurers can zero in on their own niche (vertical or horizontal) to build unique strategic differentiators for each focus market. 

For instance, the regulator can invite insurers to adopt a particular state for intensive market development. Or it can be in the form of collaborative embedded offerings. Niche opportunities are available for insurers like CreditAccess Life Insurance’s micro insurance plans, or that of Plum Insurance in employee health. Riskcovry’s plug-and-play distribution platform is another example. 

Innovative insurer strategies may often face setbacks due to limitations in enterprise systems and architectures. It can be difficult to build resilient system environments that meet changing consumer behaviour, technology driven business models, and market ecosystem demands.

This is where an insurer’s success in the emerging market ecosystem requires an organizational shift for:

  1. Innovative product design ability
  2. Resilient business and distribution model adoption
  3. Operational fulfilment capabilities, internal and external

Build innovative product design ability

“Insurance for all” requires simplified, customised, and bundled offers for each partnership. Advisors also need custom crafted DIY offering options to design and package offers. For insurers, this means a move beyond the operation of each product as an end-to-end coded system. 

In this context, it may prove beneficial to see each product as a set of customisable microservices. Product offerings can be designed with selected features that address each niche segment’s needs. This is easier in commoditised online D2C or retail annual transaction policies. It can be complex for longer term life and protection insurance products due to the orchestration of diverse micro features. 

From a product design perspective, this shift entails significant out of the box thinking. Investments in holistic enterprise architecture and systems must accompany this change. 

Craft resilient business and distribution models

Success of each niche segment requires a varied distribution model and channel. Insurers must fully leverage intermediaries like banks, IFAs, POS partners, brokers, aggregators, marketplaces, variable agencies, POS brokers, D2C, and new models. We can expect innovative models that combine micro-services and collaboration among partners. 

Performance and compensation models must also mature to include split reward systems. These must factor in success, targets linked, and qualitative aspects. Every partner must be seen as a “segment of one” with differentiated capabilities that reward quality and profitability.

Seamless fulfilment of journeys

An increase in end-to-end fulfilment challenges will accompany “Insurance for all.” Internal systems that leverage specialist Insurtech ecosystems address these bottlenecks. 

A case in point is Insurtech service partnerships that offer ready to implement global best practices. Specialist gateways like Account Aggregators (AA) open additional innovation possibilities.

For instance, many Insurtech providers offer single click embedded offerings for: 

  1. Pre-issuance verification checks in complex products
  2. Intelligent underwriting services
  3. Multi-factor risk or financial scoring models
  4. Anti-money laundering (AML) checks
  5. Claims repositories 

Orchestration of intermediaries, partner ecosystems and Insurtech may present unique challenges. Investments in orchestration of distributed microservices can be more beneficial instead of internal creation and reinvention of services. 

Integrated KPI-based performance monitoring and reward systems are essential for all ecosystems. KPIs for STP closures, combination products, upselling, cross selling, or loss ratios will be integral to every journey’s orchestration. 

Incorporate global best practices

Insurers can benefit from global innovation best practices that are accessible through internal and external Insurtech partner services. This can be at levels like product, distribution, or operational fulfilment. 

The first step is to invest in a resilient, intelligent orchestration and analytics layer that leverages microservices aligned to the business’ core strategy. External best practices from Insurtech players enable insurers to create a journey specific to their business strategy.

Key caveats on the Digital Ecosystem journey

Insufficient holistic enterprise architecture readiness and a short-term view of agile rollouts can be detrimental to an insurer’s success in the digital ecosystem. Rapid roll outs and short-term solutions may limit the true longer term robust architectures that are necessary for an agile organisation.

Insurers are aware of how to leverage Insurtech/reinsurers’ best practices and consolidated gateways to create industry-, market-, or insurer specific rules for more aligned underwriting risk controls. Standardisation will help in the case of mass products for insurers who cover large scale markets with a cost- focused strategy. 

Insurers need investments in value added services to achieve high value and differentiated offerings. Insurtech capabilities enable such value-added products. 

Insights essential to underwrite the correct risks are often a concern for insurers. Latest research from Deloitte indicates that over 60% of Indian insurers have seen an increase in fraud incidents, especially in categories like Life and Health insurance. Indian insurers incurred an annual loss of Rs 45,000 crore every year due to insurance frauds (as of 2021). Data driven insights from specialists and intelligent services will become a norm for automated or bundled offerings as well as differentiated products. 

To sum up

Success in the new “Insurance for all” market necessitates Insurers to address each niche protection or bundled financial offering using micro-granular services. This requires investments in a truly resilient enterprise architecture that allows flexible orchestration of internal, partner, and ecosystem microservices. 

A global Insurtech like C2L BIZ is the ideal choice to enable your insurance business’ digital distribution transformation needs. With customer implementations that span across 12 countries, C2L BIZ has successful relationships with over 40 leading insurance carriers. 

Contact us on for a comprehensive evaluation of how your insurance business can gear up for the “Insurance for all by 2047” ecosystem.