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Guest Column How e-insurance benefits policyholders and agents

How e-insurance benefits policyholders and agents

There are multiple benefits in holding insurance policies in electronic form under a single e Insurance Account (eIA).
Ramanan S V, CEO, CAMS Insurance Repository Services Oct 14, 2015

In India the number of mobile phones is larger than the adult population. This has enabled us to bridge the divide between India and Bharat as access to internet through mobile is now widespread. The Digital India campaign initiated by government is looking at utilising the JAM Trinity: JanDhan Bank accounts, Aadhar and Mobility. This is where there is an opportunity for insurance companies to ride the wave.

Adoption of mobile technology will benefit all the constituents in the eco system:

  • The insurer would benefit from lower cost of operations (paper based processes are expensive), innovation and customisation of insurance products can be achieved at low costs
  • The distributor would benefit from; reduction in client acquisition and servicing costs; simplification of KYC as this would be based on Aadhar (Bio metric or one time password)
  • The policy holder; enhanced accessibility for purchase and post purchase experience

A typical misconception in the industry is that technology is only for the urban educated consumers. However, in my opinion the traditional method of looking at literate/illiterate needs to be revisited. We need to look at Digitally Literate and Digitally Illiterate. With the advent of social media (Facebook, Twitter), e-commerce sites (Flipkart, Myntra, Snapdeal, IRCTC), convenience services like (Uber, Ola, Groffers), more and more Indians are digitally literate.

Let me explain my point with an example: I live in Chennai; the auto drivers here have a notorious reputation of fleecing customers. With the advent of Ola Autos, I recently wanted to experience it and took a ride (Ola has roped in Autos in Chennai). On chatting with the Ola Auto driver, I found he had adapted the technology as this gave him a better livelihood. He said, he knew exactly where his customers were, he could pick and drop them without having to negotiate rates and his overall income had risen after he adopted technology.

So the point I wish to make is, with simplification of technology, the adaption of all cross section of population to technology would be fast. Certain financial products are already high on the technology curve – be it equities market, mutual funds, banking transactions or even NPS. These are all available only in the electronic platform. So much so that, some private sector banks charge customers for visiting branches.

RBI has recently approved setting up of payment banks. These payment banks are likely to ride the mobile technology to reach the potential consumers. They will play a significant role in the financial inclusion in the country. While access to internet through broadband was available to the urban India, access to internet through mobile device has reached Bharat (Rural India).

E-insurance is not just about the opportunity to buy insurance through an electronic channel. In my opinion, gratification is the key. Policyholders should be able to hold policies in electronic form and have the ability to transact in electronic form. The most basic transaction is renewal premium payments. This is already enabled in the electronic form. But the real reason for buying an insurance policy is for a rainy day. The moment of truth is when the policy holder or a nominee has to make a claim. They should also be able to make a claim through an electronic form.

IRDAI has announced a path breaking initiative called Insurance Repository. This is first of its kind in the insurance industry.

An Insurance Repository is a facility to help policy holders buy and keep insurance policies in electronic form. Insurance Repositories, like share depositories or mutual fund R&Ts, will hold electronic records of insurance policies issued to individuals and such policies are called “electronic policies” or “e-policies”.

A policy holder needs to open an e-Insurance Account (eIA) with one of the Insurance Repositories to be able to buy and keep policies in electronic mode. An individual can have only one eIA with any one of the Insurance Repositories. Once an eIA is opened, the account holder can buy and keep all his electronic insurance policies – be it life, pension, health or general - issued by various insurers under this single account.

There are multiple benefits in holding insurance policies in electronic form under a single e Insurance Account (eIA).

 

These benefits include:

 

  • Safety: There is no risk of loss or damage of a policy as may happen with paper policies; the electronic form ensures that the policies are in safe custody and can be easily accessed when needed.

 

  • Convenience: All insurance policies, be it life, pension, health or general, can be electronically held under a single e IA. This means all details of all policies are available in a single account (place). The details of any of the policies can be accessed at any time by logging on to the online portal of repositories. Premium for all the policies can be paid online and many service requests or complaints can be logged at this website.

 

  • Single Point of Service: All service requests in respect of eIA or any of the electronic policies held under the eIA can be submitted at any of the repository’s service points – there is no need to go to the offices of individual insurance companies for service.

 

  • Less paper work: When you want to buy a new electronic insurance policy under an existing eIA, you don’t need to go through KYC verification all over again, if there are no changes to your KYC details already recorded in your eIA. Further, if you want to make any changes to your personal details like address or contact number, it is enough to change the details in your eIA with a repository by submitting a single request.

 

I personally believe that with the government’s initiative on Digital India and the IRDAI enabling this initiative through the insurance repositories, the insurance industry is well poised for exponential growth by adopting e-insurance.

 

The views expressed in this article are solely of the author and do not necessarily reflect the views of Cafemutual.

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