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Irdai’s push will make insurance cheaper for consumers and enable a consolidated view of all policies.
Illustration: Uttam Ghosh/Rediff.com.
The Insurance Regulatory and Development Authority of India is giving the insurance sector a huge digital push that will make life easier for customers.
After introducing the e-insurance account, it is now planning to make policies available at e-commerce platforms. The regulator’s e-commerce exposure draft, which was put up recently, has a host of guidelines and measures that e-commerce companies need to comply with to sell policies online.
Insurance at e-commerce platforms: The availability of products online will allow customers to choose from various products available in the market. When we shop online, we log-in to shopping portals to check products available and then select from different brands, depending on its price and features.
Likewise, availability of insurance products online will enable the customers to check benefits offered by various products and to select the best one, according to their requirement
Differential pricing, proposed by the regulator, would allow insurance companies to offer policies at cheaper rates compared to what is sold offline.
When we shop online through any portal, we can filter the products by price (‘low to high’ or ‘high to low’). The same can be done when insurance policies will be available online.
For payments, the customer can just log on to the website, type his card/bank account details and pay the premium instantly. This will prove to be a major boon for customers since they will be able to pay the premium as per their convenience.
The buying and selling of products will be strictly monitored by Irdai. Hence, breaching of customers’ rights is likely to be negligible. Only registered companies will be allowed to make their products available online.
This, coupled with the e-insurance account, will completely transform the way insurance is bought in the country.
An e-insurance account: Last year, Irdai introduced e-insurance accounts, which is mandatory for every new insurance policy that an individual buys. It allows the customer to streamline all their policies in one account, which helps them access all policies at the same time.
To enhance the reliability, the regulatory has made provisions for auditing of system and processes of insurance companies. The objective is to ensure data security and privacy is well-maintained, protecting customers’ database.
The e-account works in the same way as a dematerialised (demat) account used for investing in the stock market.
When we invest a systematic investment plan of any mutual fund company, we need to have a demat account. If we have more than one investment in mutual funds, they will appear under one demat account. This enables us to consolidate all investment till current date along with maturity and return percentage.
The same approach will be applicable for e-insurance account.
The e-insurance account can be opened in two ways. You may select the repository of your choice, log in to repository website and fill the application form, attach the know-your-customer or KYC documents and submit it online. After verification, the repository will generate an e-insurance account number. The account details along with password will be emailed to you.
The other way is to log in to insurance company website and fill the application form. The process to open the account remains the same. One key benefit of opening an account through insurance company website is that once the account is opened, the customer can start buying policies online immediately. Repositories can only open the account and cannot sell policies.
The choice of selecting the repository lies with the customer. They can opt for any of the five repositories, which include Cams Repository Services, Karvy Insurance Repository, Central Insurance Repository, NSDL Database Management and SHCIL Projects. If you opt for a repository, an official will take care of all activities and offer help to you.
Even the existing physical/paper policies can be converted to e-policy by filling up the application form available with repository or insurance company.
The premium can be paid online anytime by logging into the account. There is less chance of missing premium payment as dates and amount will be activated online and you can get a reminder in the email. You may also give a standing instruction to your bank to pay the premium on a stipulated date. This will save you from setting numerous reminders to pay the premium for various policies.
Move to need-based insurance: Buying online has increasingly become the norm these days. Now, insurers need to invest in better technology and analytics to deliver the right solution for customers. Going forward, an individual can add multiple products to his cart.
More importantly, the key differentiator will be moving to need-based selling on the online platform rather than an agent pushing individuals to buy a plan.
The e-insurance account is a new paradigm which brings in a lot of attendant benefits to both the insurers and the customers. Policies can 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.
With policy always available in the e-insurance account, customers will not have any difficulty in retrieving the policy details while lodging a claim.
It also comes with a cost advantage. The main benefit, however, will be the central KYC, which will result in the creation of a reliable and comprehensive database complete with the insurance history of the customer along with details of claims.
K G Krishnamoorthy Rao is MD & CEO, Future Generali India Insurance Co.
