Soon, You would be Able to Buy Insurance Cover from an ATM

The government is looking to revive a plan to have more touchpoints for insurance by having ATM-like centres that will be able to complete insurance sales within minutes.

Using their Aadhaar card, an individual will be able to give their KYC details after which a policy can be bought. Though this proposal was floated about 2 years ago, lack of adequate data and consensus had led to this plan being put on the backburner. A proposal to make e-commerce companies dispense insurance policies is also underway. Life insurance may be experimented with this initiative first.

"A formal communication may be brought out in the next few months. The idea is to make the process simple and interactive so that customers themselves walk in to the centre and buy the product. It may start with a number of easy-to- understand product options from a few insurers," said a source close to the development. The government will work with the insurance regulator in this proposal. Here, when a customer visits the centre, with a few clicks on the machine a policy can be bought. If they have an e-insurance acount with any of the registered insurance repositories, the policy will be directly sent in an electronic format. However, if they wish to have a physical policy, it can be printed. While in the initial phases, one to two executives will assist in the buying process, the future plan is to have a completely digital centre without any manpower.

Currently, all the 24 life insurance companies sell their products through multiple distribution channels including agency, banks, brokers, common service centres, micro-insurance agents and the internet. If launched, this would be another channel in this list.

Insurance is still considered a push product, except in areas like motor insurance where third-party cover is mandatory and some type of health insurance products which are still bought by individuals. Otherwise, it is largely sold and not bought.

Life insurers themselves are experimenting with having a quick mechanism of selling products. This includes tablet-based selling where an agent is not required to sit and calculate the premium to be paid by a policyholder. With this, turnaround times are also coming down.

Industry executives said that the idea was to reduce the dependency on insurance as merely a tax-saving tool and use it for protection instead, especially since the country has no social security theme.