Narayanan on Digitization in Insurance Industry
Future Generali India Life Insurance is a joint venture between three leading groups: Future Group - A leading retailer of India, Generali Group - A global insurance group and Industrial Investment Trust Limited (IITL) - A leading investment company. Future Generali Life Insurance provides a complete range of simplified solutions for the financial security of customers and enterprises, including savings, familyprotection, Unit Linked Policies as well as group products.
Today we are at the cusp of a technological revolution. With more than 300 million internet users, India has the second largest internet user base in the world. Realizing this rapid growth of internet usage in India, every sector, including insurance, have shifted its focus towards building non- traditional platforms. The availability of insurance products online, different apps or software developed by the companies to serve their customers, introduction of e-insurance account and announcement of e-commerce exposure draft are some of the major moves in the path of digitalisation.
An Overview of e-commerce ExposureDraft and Insurance Self-NetworkPlatform
What the draft regulation seeks to do is to provide a structure to this segment and rules of conduct for the vendors which will infuse transparency and customer centricity. The stipulation that only market participants who are registered with the Regulator can operate in the online space will go a long way to instill confidence in the minds of the customers. Further, the regulatory provisions on audit of the IT systems and network, particularly the insistence of review of controls by an External Information System Audit or (CISA) and compliance to information security management standards of the International Organization for Standardization or the International Electro-technical Commission or its equivalent, will help to enhance the reliability and credibility of the entire model. The objective of these provisions is to ensure, apart from robust performance, high levels of system integrity and data privacy.
Differential pricing proposed by the insurance regulator would enable insurance companies to offer policies at cheaper rates as compared to what is sold offline. However this may not happen if the policy is sold through online platform of brokers or aggregators. Enabling differential pricing for products sold through Self Network Platform is aimed at incentivizing sales in this infant channel.
While mandatory e- KYC and e- Insurance Account for online business are welcome moves and will go a long way, in ways more than one, to put the business of insurance on strong technical and commercial foundations, it would certainly be a great proposition to make these mandatory across other modes of business sourcing.
The payment of premium can be done through electronic mode. Electronic payments are becoming increasingly popular due to it widespread use in online shopping and banking. The bigger advantage is instant gratification of policy issuance that enables customers to transact 24x7.
This will not only boost up the insurance industry but also the ecommerce industry in India. The insurance companies can improve on its distribution channels and websites selling the policies will also get benefit out of it thereby increasing B2B business.
e – Insurance Account
From 1st October 2015, IRDAI has made e-insurance account a mandate for every new insurance policy a buyer opts for. With policy being available in the Demat Account, customer can now retrieve the policy details while lodging a claim. The customer can select the repository of their choice and all insurance policies will be available under one account through which they can get details of any of the policies at any time. He/she need not pay a physical visit to the insurance office or branches to register their claim or access other information about their policy. There will be appropriate functioning of the account as all the activities will be under IRDAI rules and regulations.
The physical insurance policy can also be converted to e-policy by submitting a completed application form. Every insurance company will also have assigned repository. The customer can either login to the repository website or inform the insurer to convert the policy to electronic form and link it to their e-insurance account.
The e-insurance account is a new paradigm which will come with a loT of attendant benefits to both the insurers and the customers. Policies will be issued instantly and directly to the customer in the digital form and hence, the question of delay in issuance or non-receipt of policy will not arise.
Through these two developments we will see an upsurge in e-proposals as more people would intend to purchase policies through mobile apps and software. The industry will see an increase in claim intimation on digital platform. Additionally, the electronic transfer of data between hospitals, Insurance companies will prove to be more convenient across stakeholders thereby reducing the claim approval as well as settlement time. This would also help in terms of uniformity of documentation, reduction in fraud cases as well as product innovation in the long run.