E-insurance policies to provide better reach, lower costs

The recently unveiled Insurance Repository System for individual policyholders is a pioneering initiative of the Insurance Regulatory and Development Authority of India (IRDA), the first of its kind in the world, and comes as part of its efforts to improve services to policyholders and increase insurance penetration.

The Insurance Repository System will enable subscribers to buy and keep insurance policies in dematerialised (demat) or electronic form, called e-Policies.

The IRDA has mandated the online issuance of motor policies, domestic and international travel and accident policies. In addition, the IRDA has specified vulnerable and disaster-prone areas that require the compulsory issuance of e-insurance policies.

The primary goal for e-Policies is to eliminate the use of paper and associated risks of storage and loss, and to provide convenience and safety to customers. It will also make it an economical proposition for insurance companies to issue and service e-policies as compared to traditional paper policies.

This reduced cost is estimated to make lower ticket systems much more viable and is expected to give a further boost to greater penetration of insurance in India.

Put together, e-insurance policies and the Insurance Repositories can provide several benefits to policyholders. Here are some of the primary benefits:

Increased Safety An electronic form makes sure that the policies are in safe custody and can be easily accessed. A copy of the policy can be downloaded to a remote computer via secured networks at any time by an authorised user.

When a buyer purchases an insurance policy online, all communication is through the official channel with minimal to no third-party human intervention, thereby reducing the chances of fraud significantly. The buyers fill out the proposal form by themselves - reducing chances of error in filing - and receive accurate confirmations and supportive documentation once the process is complete.

Errors in filing information are dealt with securely without any human looking at sensitive data such as bank authentication details or credit card numbers. Any need for data sharing between government and private enterprises for the purpose of financial or identity verifications is dealt with instantly and securely over electronic medium.

Furthermore, the platform that supports e-policies are subjected to multiple vulnerability tests to safeguard against malware and cyber theft. These platforms are required to have strong encryption standards and be ISO certified.

Benefits of Convenience

Perhaps the biggest advantage of e-policies is convenience. Having a central repository enables buyers to access all types of insurance related data and documents using just one identification number and through one unified portal, no matter how many insurance policies an individual has purchased or from how many different companies.

The Insurance repository, once a year, will send a statement of account to the e-Insurance account holder with the details of the policies of the account holder. This gives a single view of the entire portfolio, which helps in monitoring the due dates for premium payment. Premiums for all the plans can be paid online, and several service requests can be logged from the e-Insurance account.

Single view of all systems will be made available to an authorised person in case of death of the e-Insurance account holder. This would help in processing claim and disbursing the same in time. Policy benefits would be paid through an electronic facility to the registered bank account, thus ensuring speedier and favourable settlement.

Moreover, since all policies are electronically stored, the amount of paperwork for each customer is reduced almost to the point of cessation. With the central repositories and digital repositories, insurance companies can request data directly from the concerned institutions upon receiving a claim from a customer. Furthermore, the usage of mobile apps and digitally scanned copies of documents is going to make claim processes fast and convenient.

Single Point of Service

Another extension of the convenience of e-policies is that there would be a single point of service for all insurance purchases. The policyholders will have an increased number of touch-points for having their servicing needs attended as the Insurance repositories also function in addition to the Insurers.

Every service request related to any of the policies can be submitted to any one of the Insurance Repository Service points without having to contact separate insurance offices like was the case until now. Moreover, with e-filing, companies are now arming themselves with modern communication platforms like social media to respond conveniently and efficiently to customer queries in real time.

Major insurance companies are reporting hundreds of queries via popular social media platforms like Facebook and Twitter and concerns are being addressed at unprecedented speeds. Such communications are fostering business-customer relationships and making grievance redressal system far more efficient than before.

With the advent of e-policies, brands now have the tools to quickly gather information regarding specific customers and policies, and this, combined with the internet and mobile penetration, is enabling them to develop customised mobile applications specifically geared towards bettering customer relationship.

Currently, there are five such nationalised repositories and insurance companies that will have to tie up with these. For now, however, only life insurance policies have been upgraded to be housed in these repositories and other forms of insurance such as health, vehicle, and travel policies are in the process of upgradations. Nevertheless, it is only a matter of time before policies become completely electronic, and considering the benefits they bring to the table, it will be a very welcome move.

The writer is CEO and co-founder of Bankbazaar.com.