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ICICI Lombard Expert Blog
 

A Slow but Gradual Increase in Digitisation of Insurance Policies

June 10 2018
Insurance

The past six months have witnessed a slow but steady increase in the business volume of Insurance repositories, said a top official of CAMS Insurance Repository Services. There is still a long way to go, he further added.

The CEO of IRDAI (Insurance Regulatory and Development Authority of India), S.V. Ramanan told IANS that, “The business volumes have increased in the last six months owing to IRDAI’s decision asking the life insurers to digitise all policies received in digital format.”

Observing that out of the 1.5 crore life insurance policies sold by a leading public life insurer, one crore policies by private life insurers and 12 crore health and motor policies sold by non-life insurers annually in India, there are only 12 lakh life insurance policies in digital format till date, he said that there is a long way to go. Ramanan also mentioned that the business was slowly but surely growing.

He noted that, “While average cost for a life insurer for maintaining a policy in a repository is about ₹40 per year, it is ₹10 per year for a non-life insurer in respect of health and motor insurance policies.”

Insurance repositories are responsible for keeping the insurance policies in the digital or demat form, like company shares. There are four insurance repositories in the country in total, viz NSDL, CDSL, CAMS and Karvy. According to the regulatory norms, the digital record keeper forms the third party.

Ramanan added that the amount spent by an insurer on the maintenance of policy in the traditional paper format is ₹150. Therefore, going digital can be a major cost saver. He added that the overall cost of maintaining a digital policy may come down once the volumes increase.

*Source: Daily Hunt

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