As the country embraces a digital revolution at the behest of its 750 million smartphone users, insurance providers are positioning themselves to incorporate technology as a fundamental pillar to positively impact several avenues centering the insurance buyer.
The Insurance Regulatory IRDAI is pushing the envelope starting with making KYC mandatory for the non-life insurance sector like motor insurance & health insurance.
This would be progressed to e-insurance accounts & demat policies. Finally, Bima Sugam - an online platform or marketplace for selling all kinds of insurance products, would spin off on the basis of these two.
All these steps would make life easy for insurance buyers. Right from purchasing insurance, storing policies , actively making changes to policies, to making claim processing easier - these steps would positively impact the entire insurance cycle at each & every step.
eKYC – A Landmark Achievement
IRDAI has made KYC Mandatory for the non-life insurance sector, like motor & health insurance policies from 1st November 2022.
Currently, this was voluntary; but now insurance companies are gearing up to integrate their systems with IRDAI authorised KYC companies - NSDL, CDSL, KARVY & CAMS.
Traditionally, insurance providers required new customers to fill in paper forms and submit documentation for proof of identity and address. This documentation would then be analysed manually before a decision was made about onboarding the customer. These kinds of manual KYC tasks are time-consuming and prone to human error, not to mention being annoying for the customer.
Moving to eKYC marks an important step towards instant and secure customer on-boarding.It would prove remarkable in the policy aggregation process, helping insurance brokers replace mounds of paperwork and image uploading with something simple such as an OTP. Certified eKYC agencies will greatly enhance the chances of obtaining cover even in the rural interiors where one has a basic document like Aadhar.
Also, Automating KYC processes frees insurance firms to add value to their customers by driving operational efficiency and producing better customer experiences.
Insurance Dematerialisation & e-insurance accounts
Dematerialisation means converting physical documents into an online format.
E-insurance accounts would serve as a repository of all digital insurance policies that the insurance buyer has subscribed to.
The insurance regulator is mandating the companies to open these e-insurance accounts (e-IA) for their insurance buyers, which would act as the first step towards dematerialisation of insurance policies.
The e-insurance account system holds several benefits for policyholders. It ensures easy access to their policy details & policyholders need not worry about their physical policy getting misplaced.
Insurers will not only have to provide the eIA facility to new policyholders but also the existing ones. You only need to open such accounts once. Insurers will have to convert existing policies into demat form within a year of the regulations becoming effective.
To summarise, eKYC & eIAs would enable Bima Sugam, a digital platform for buying insurance, servicing changes to policies and settling claims being developed by IRDAI to make the entire insurance process convenient & price effective to the policyholders.
