It is crucial to focus on incremental transformation: Sun Life’s Divya Madaan

India's insurance sector has seen significant changes over the past two decades, driven by technology integration and regulatory advancements from the Insurance Regulatory and Development Authority of India (IRDAI). The Covid-19 pandemic has further accelerated digital integration in processes like policy issuance, claims management, and renewals, enhancing the customer experience. In a recent discussion with TechCircle, Divya Madaan, Director- Technology Management and Transformation,  Sun Life Global Solutions, discussed how artificial intelligence and machine learning (AI/ML), automation, and digital tools are transforming insurance operations in India. Edited excerpts:

What emerging technologies are you currently excited about in the insurance sector?

There has been a technological transformation in the insurance industry in recent years, a sector that was previously known for being slow in adopting new technologies. What interests me is the integration of AI/ML in various aspects such as underwriting, claims processing, fraud detection, and personalised customer and employee experiences. This results in improved efficiency, better data handling, predictive modelling, and more accurate anticipation of customer behaviour. Nowadays, companies can utilise data management and big data analytics for predictive modelling, risk assessment, and obtaining valuable customer insights. I also recognise the benefits of implementing agile methodologies, which aid in restructuring team dynamics and promoting adaptability. Insurance firms are increasingly embracing Cloud Computing to enhance scalability, cost-efficiency, and data storage and management flexibility, while also incorporating Chatbots to enrich customer and employee services, reduce costs, and streamline interactions. Furthermore, many organisations like ours are engaging in partnerships and collaborations with Insurtech startups to foster innovation and maintain a competitive edge in the sector.

How can insurance Chief Information Officers (CIOs) leverage advanced technology to drive innovation for better customer experience and return of investment (RoI)? Could you explain with an example?

Various insurance companies have utilised emerging technologies in different ways to promote innovation such as AI and ML for fraud detection and claims processing and updating outdated systems. The approach involves transitioning to modern architecture, embracing new tools and technology, implementing necessary changes in the organisational structure, and more. For instance, a company can use AI to swiftly process claims, automatically identifying and denying fraudulent claims, resulting in decreased fraudulent claims and substantial cost savings. The decrease in fraud ultimately results in reduced claims payouts, thereby directly enhancing profitability. Consequently, quicker and more precise claims processing improves customer satisfaction and trust in the company. There have also been efforts to build chatbots that offer more human-like experiences that are no longer just digital assistants; but trusted advisors, guiding customers through the complex world of insurance options effortlessly and accurately. They signal a move away from generic solutions towards personalised, engaging interactions.

In which areas do you think companies will increase their focus and technology budget this year?

Businesses are prioritizing lean organizational structures to enhance agility and accelerate delivery while maintaining product quality. This year, technology budgets are expected to rise, especially for modernizing legacy systems, boosting cybersecurity, and investing in AI and data analytics. There is also an emphasis on migrating infrastructure and applications to the cloud for improved scalability and cost-effectiveness, along with funding for collaborations with insurtech start-ups. As a data-intensive industry, investments in stringent access controls, decentralized data storage, and cloud-based data management are crucial. Companies are increasingly focusing on cybersecurity solutions to protect sensitive data and ensure regulatory compliance. Additionally, they are training employees and hiring experts in data science, natural language processing (NLP), full-stack development, automation, DevOps, cloud computing, Agile coaching, change management, and other relevant fields.

What strategies should companies employ to succeed in their digital transformation journey?

Companies looking to succeed in their digital transformation journey should have a clear vision, direction, and strong leadership commitment. This involves allocating the optimal budget for resource requirements and technological advancements. Additionally, agile methodologies have been adopted to ensure faster time to market and increased flexibility in adapting to changing market conditions. Understanding customer needs and designing strategies to enhance client impact is also a key focus. Furthermore, moving core systems and applications to the cloud has been prioritised for better scalability, security, and cost management. Strengthening cybersecurity measures to protect customer data and comply with regulatory requirements is another important aspect. Lastly, upskilling and reskilling employees to develop digital competencies and promote a culture of continuous learning are being emphasized.

Which technologies do you plan to focus on in the next 1-2 years?

The strategic and operational focus this year is on several key technological domains, including the utilisation of AI and ML technologies to improve existing systems and processes, safeguard and streamline data, ensure compliance, address increasing cyber threats, enhance scalability, and lower costs through the adoption of cloud infrastructure technology. We are also prioritising the automation of repetitive tasks, the implementation of new business models through agile methods, and the adoption of a platform operating model. Our overall goal is to enhance operational efficiency, improve customer and employee experiences, maintain competitiveness for sustained growth, and address emerging risks in the industry.

In terms of benchmarking against competitors, which technological areas do you believe you need to pull up?

It is crucial to focus on the incremental transformation that is currently taking place. By conducting further analysis and delving into a broader transformation metrics framework, we can ensure that we are moving in the right direction. It is essential to remember that taking smaller steps is key in this process.