e-Insurance could Prove Beneficial, if LIC takes the Lead

DEMAT-insurance is yet to take off in India. Of a 1.25 billion population in India, only 9.875 crore have insurance. And of this, only 9 lakh (0.9%) have opened e-insuranceaccounts, said industry players, clearing showing that e-insurance account initiative despite being three-years- old has not taken off like other government schemes such as digi-lockers, UIDAI.

How do e-insurance accounts help? In events like floods or tsunami, where people lose all their belongings, including vital documentation to prove their identity -- a digital locker helps in them proving their identity and getting their claims settled.

Demat insurance has not found too many takers, with many saying that they have seen only a few hundred customers sign up. Data repositories said that the biggest roadblock to the initiative taking off is the non-participation of LIC. "While the regulator IRDAI has been promoting e-insurance, it has not made creation of these accounts mandatory. As of now, they have defined an e-policy as a policy that can be documented in electronic format or downloaded from the insurer's website.

Unless they make it mandatory, insurers are going to look at cutting costs," said Cyrus Khambata, CEO, Central Depository Services Limited (CDSL).

Another hurdle is that the general insurance industry is yet to catch up. While 24 of the life insurance companies in India have signed on, only 8 general insurance players have put the IT systems in place for e-insurance accounts.

At Liberty Videocon General Insurance Company, its CEO Roopam Asthana said that of 6-7 lakh customers with the company only a few thousands have signed up. At ICICI Lombard, which has 15-16 million customers and got on board the platform in December, customers have not shown much interest in e-accounts.