IT in Insurance

My latest infatuation with Information Technology (IT) compels me to write on this subject area.

We have seen that the last seven years have been very vibrant for insurance industry. There has been an immense change in the way business is conducted. From monopolistic regime to cut-throat competition, the entire paradigm of business has not only shifted but actually been hurtled into a completely fresh orbit. Customer’s ecstasy has replaced customer’s delight.

Since life insurance is a marathon and not a hundred-meter race, with long term commitments, management of data is a Herculean task that every company struggles with, and tries to overcome. Hats off to LIC for their manual management system of the past; it is almost impossible to imagine today that countless people laboriously pored over manual books to maintain some sense of order and design, and pretty well managed design and order at that!

However, converting to IT systems is not merely about feeding data into a lifeless computer so that it can churn out the receipts and policies and sundry other things at the click of a button though the importance of that also cannot be ever ignored. With customer’s expectation risen manifolds (from proposal sourcing to underwriting to issuance to renewal collections to any alterations to maturity proceeds or death claims), it is imperative that these things are well taken care of. But at the end of the day, in today’s fierce scenario, it is merely a hygiene factor, and not something to really gloat over.

Where they fail and fail pretty miserably is to percolate the real usage of the entire spectrum of the convenience available in the IT system to the end-user. And here, I refer as end-user, the staff of the company. It is like giving a Swiss knife to someone who will probably only use to sharpen his pencil. (This is actually true of any industry and/or company which has only recently shifted to the IT-mode; and since I am into training, I realize how badly trained some of the staff can be!)

A second glaring gap is between the development and the execution. What looks great on the paper can turn out to be damp squib in practice. This could be due to faulty understanding of the insurance industry by the development team. It could also be due to a wrong brief given by the insurance company. Requirement gathering is a challenge. After all, insurance industry may seem a cakewalk, but its various nitty-gritties can flummox an ordinary person. A small error in the designing of logic can create both financial and legal havoc. For example, in my earlier assignment (not naming the company for obvious reason), the commission of the agents were disbursed even before the issuance of the policy which lead to over payment of commission to the tune of 8 crores. Half of that never got recovered.

I firmly feel that IT systems in India at least have not been fully utilized by the users and there is still a long way to go as far as IT is concerned to reap the maximum benefit of technology.

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