Data enables hyper-personalization in insurance products and pricing: Experts – Banking and Financial News

Massive data combined with the power of emerging technologies such as generative AI has enabled insurers to design and deliver more personalized products and solutions, according to insurance industry experts.

Ravi Vishwanath, CEO of Narayana One Health and Director of Narayana Health Insurance, highlighted that health insurance in India is still largely transactional, often purchased to cover expenses in case of hospitalization. “With our expertise in healthcare and leveraging consumer data, we can now create the right stimuli to keep people healthy and reduce hospital visits,” he said.

“Hyper-personalization in terms of product offerings and pricing is possible, even in auto insurance,” said Vishal Gupta, CEO, PhonePe Insurance Broking Services. Gupta explained that, for example, women drivers are generally considered safer compared to men. “Today, data allows us to design policies with different prices for women or drivers in cities versus those who drive on highways, which tend to be riskier.”

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In another session, Avinash Naik, president and chief information officer, Bajaj Allianz General Insurance, said that the insurance industry has accumulated huge amounts of unstructured data over the decades. Technologies like GenAI, he said, can help insurers summarize this data in meaningful ways to improve underwriting, product pricing and even fraud detection.

“Insurers are learning how to structure unstructured data and redesigning algorithms to extract the necessary insights,” said Anand Sanghi, head of retail and government at ICICI Lombard General Insurance. He also noted that insurers can now select products and solutions using data from social media platforms such as LinkedIn, Instagram and Facebook.

In another panel discussion, life and general insurers discussed the impact of economic challenges on the insurance sector. Commenting on interest rate fluctuations, Jitendra Attra, CFO, SBI General Insurance, explained that many general insurance companies depend on investment income. “A prolonged period of low interest rates could impact your profitability,” he said.

Attra added that while the industry is currently comfortable with loss ratios exceeding 100% in some segments, if investment returns fall, underwriting practices will need to be strengthened.

“Interest rate risk is better managed by banks, while we are better positioned to deal with mortality risks,” said Dhiren Salian, CFO, ICICI Prudential Life Insurance.

He explained that, unlike general insurance, which is renewed annually, life insurance is a long-term contract. The premiums received are invested in instruments that can protect against immediate fluctuations in interest rates.