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Since September this year, Inbound Mantra has seen increasing HubSpot enquiries from the Insurance sector – Life and General Insurance companies and also Insurance brokers.
Interestingly, their challenges are not entirely around lead generation. For a change, these Insurance companies were gearing up to make their operations productive and effcient, to grow faster and compete better.
It is interesting to explore a new sector and learn about their challenges. But for the first time we had to confront sticky regulatory issues, specifically around the capture and storage of customer data within the India territory.
In this particular case, it was about using an inbound marketing software built and hosted on the cloud – HubSpot.
It is a funny dichotomy.
One one end, there is a growth imperative to invest in technology and on the other, the very regulations that aim to support growth, appear to stifle it.
We foresee further ambiguity on this subject.
For the benefit of cloud marketing software companies looking to serve the Insurance sector in India, we are putting down four factors that could give direction to this discussion on storing customer data within India.
Insurance Regulatory and Development Authority of India (IRDA) regulates India’s insurance sector and makes policies in the interest of the customers to bring orderly growth to Insurance institutions in India.
Regulation 7(c) of IRDA (Registration of Indian Insurance Companies) Regulations, 2000 states that an Indian Insurance company has to carry out all its business functions within its organization.
The scope of this rule is very ‘open’ thus adding ambiguity about storing customer and prospect data outside the organization. This could have a material bearing when using cloud based software that may be hosted outside India.
Metlife India was fined by IRDA for a similar compliance issue.
India’s Insurance sector has grown at a CAGR of 15% in the past decade making it a USD 72 billion industry in 2014. The projections from IBEF suggest that the industry is all set to become a USD 280 billion industry by 2020.
The potential and scope is huge for insurance companies, but the challenge is to meet this huge demand successfully, without being overwhelmed. To cater to this rising demand, investments in cutting edge technology and business process automation are indispensable.
Insurance buyers, today, have more access to information and insights. They don’t rely (completely) on the suggestions of brokers or companies these days and prefer doing a complete self audit before finalising anything.
This is another challenge for Insurance Companies, even in a growing market. It requires Insurance companies to change their go-to-market strategy, map buyer behaviour and then make relevant offers accordingly. It is a marketing challenge, requiring technology expertise not completely available in India.
Insurance Institutions will need cutting edge software to meet these market challenges and improve their productivity.
But, the software sector is increasingly moving to the cloud from an on-premise model. This creates further questions about the actual residence of data. Generally, the acceptance and adoption of enterprise-level cloud based software is low in India, beacuse of security issues and limited understanding.
This issue can definitely be addressed using a combination of private, hybrid and public clouds. But, such custom approaches would have their own lead time and costs. Would Insurance companies be willing?
All this has queered the pitch for technology investments in the Insurance Sector. Even after identifying the need for a technology investment, Insurance companies are not able to make one, with confidence.
We invite stakeholders to share their challenges (using the comments section) in pitching for technology investments in the Insurance sector.