Insurers Strive to Meet e-Policy Deadline

Insurance companies and repositories are gearing up to meet the October 1 deadline for issuing electronic policies to those who pay Rs 10,000 or more as premium annually. All life and motor retail policyholders would get their policies in an electronic format.

The Insurance Regulatory and Development Authority of India (IRDAI) had said, in Issuance of e-Insurance Policies Regulations 2016, that these norms would come into effect from October 1. Electronic policies are a documentary evidence of the contract, issued and digitally signed by the insurer. Customers would have an e-insurance account. S V Ramanan, chief executive officer, CAMS Repository Services one of the five Irdai-licensed insurance repositories said general and health insurers who have not yet tied up with repositories are now signing agreements to issue electronic policies.

“However, overall traction is low as it is the initial stage. Customer adaptability is expected to be fast.” Irdai has asked every insurer soliciting business through the electronic mode to create an e-proposal form, similar to the physical proposal form approved by the authority.Such forms should enable easy processing and servicing. The e-form will also have a provision to capture the electronic insurance account number. Several life insurance companies have tied-up with repositories; large players such as Life Insurance Corporation of India have launched their own platform.

The regulator said policyholders would also get the hard copy of the e-form.Puneet Sahni, head, product development, SBI General Insurance, said insurers can also issue electronic policies on their own instead of tying up with insurance repositories. “The transition would be seamless for customers.”For general insurance, in all retail policies (except motor) and individual personal accident and domestic travel with annual premium above Rs 5,000, the policy will have to be issued in an electronic format. For motor retail and individual overseas travel insurance, all policies will be issued in electronic format.Micro-insurance policies are exempt from these norms. However, additional investments may be required to be made by insurers.

M Ravichandran, president, insurance, Tata AIG General Insurance, said companies can benefit by creating a large network of digital touch points, building more transparency and reach for distribution. “This also means insurance companies will have to be ready to undertake multiple integrations in a short span of time.”

According to him, many insurance companies will need to invest in solutions which allow integrations. “This platform would require a technology partner or in-house tech capability. From a customer’s point of view, this process will be cost effective,  efficient and safe.”At present, only about 1-1.5% policies are sold in the electronic format in the country.Irdai estimates suggest insurance firms spend Rs 150-200 per customer annually to keep policies in the physical form.