Insurance companies are adopting comprehensive digital strategies to maximise revenues through greater reach and comfort for the customer. Even the insurance regulator is promoting the digital platform for demat policies and effective grievance management.
Beginning with tentative moves by a few insurance companies a couple of years ago, most life and non-life insurers are now creating a robust online channel for distribution, which constitutes about 20% of total sales for insurance companies. In fact, more than 1 lakh term plans were sold online during the last financial year. The market for online life insurance in India has increased from R10 crore three years ago to over R200 crore in FY13 and is estimated to be worth around R8,000 crore by 2020.
Digital platform can enable seamless switching between channels and can give transparent comparison with products of other insurer. Product development will benefit as companies can share feedback on social networks and communities and be more responsive. Also, companies can offer value-added services integrated into a classical product. The platform will help address claims as it can become an all-inclusive service to deal with customer problems. Digital claim filings supported by mobile applications can help in automated and fast processing of claims.
Moreover, in a recent circular, Irda has said that for all customer identification procedure, insurance companies will accept the e-KYC issued by the Unique Identification Authority of India (UIDAI). The letter issued by the agency containing details of name, address and Aadhaar number will be considered as an official valid document and will be accepted for KYC purpose under the Prevention of Money-laundering (Maintenance of Records) Rules. Last year, the insurance regulator notified that the current passbook with details of permanent/present residence address were officially valid document for identity and address.
Digitisation and automation of insurance processes can yield significant process cost and customer service benefits to companies. A Boston Consultancy Group report benchmarking in South East Asia shows significant potential for reduction of turnaround times of processing policy applications by up to 208 days. Digitisation can reduce operating costs of policy processing by almost 67%.
Integrated Grievance Management System
Irda has launched an Integrated Grievance Management System (IGMS), which enables a policyholder to escalate any unresolved complaint or issue to the regulator and also track its resolution status online. A policyholder can access the portal at www.igms.irda.gov.in and register with all details. The system allows a policyholder to