The low insurance penetration in India, of less than 5% of the Gross Domestic Product (GDP), has raised concern for the insurance sector as well as the Insurance Regulatory and Development Authority of India (IRDAI). With an aim to reverse this trend, several possible solutions are in discussion, including making insurance popular online via e-commerce.
According to the IRDAI, insurance e-commerce is bound to lower costs, increase efficiency and facilitate greater reach to policyholders. This will also be in synergy with the Digital India initiative of the government. Awaiting recommendations, the IRDAI will soon make critical decisions regarding how the product category can be expanded and the e-commerce platform can be made more attractive for policyholders.
Additionally, IRDAI is focusing on allowing the introduction of simple, over-the-counter (OTC) products across the general and life insurance categories that could be sold in urban and rural areas, said Mr. T. S. Vijayan, Chairman, IRDAI. These products are expected to have standard features and pricing, and provide basic coverage across motor, health and other insurance offerings.
Other initiatives such as fitting telematics devices that can clock the number of kilometers, average speed, engine running time, etc. will help insurers collect policyholders’ data and in turn provide premium benefits. Insurance policies in electronic format that are accessible on mobile phones will also simplify the process for policyholders.