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You could soon buy insurance through a mobile app, thanks to a new initiative by the Insurance Regulatory and Development Authority of India (IRDAI).
The regulator is planning to put in place an insurance self-network platform which could be used by an agent to sell and service products on behalf of registered insurers.
“The insurance self-network platform will be available as a regular internet website or as a mobile app or both,” Randip Singh Jagpal, Senior Joint Director, IRDAI, said in a circular sent to chief executive officers of insurance companies.
The objective is to promote e-commerce in the insurance space, which will lower the cost of transacting insurance business and bring higher efficiencies and greater reach.
“E-commerce is seen as an effective medium to increase insurance penetration and bring financial inclusion in a cost-efficient manner,” Jagpal said.
All products approved under the regulations will be allowed to be sold through these platforms and they should be prefixed with the letter “i-” to distinguish them from regular products.
From both the industry and consumer angles this move will have significant implications. Till now, only insurers and web-aggregators were allowed to sell online. But now, many others in the distribution chain will also be able to sell online, according to Sanjay Tripathy, Senior Executive Vice-President – Marketing, Product, Analytics Digital & E-commerce, HDFC Life.
“This is the first time that IRDAI has recognised such a platform with robust security features. Even differential pricing of products will be permitted,” he said, adding that the move will help insurers cut costs.
Insurers will also have to create e-insurance accounts in accordance with norms to sell policies on the self-network platform.
For online sales, premiums will be paid via credit/debit cards, Net banking or any other electronic mode as permitted by the Reserve Bank of India.
On completion of an online transaction, the policy document will be credited to the buyer’s e-insurance account.
According to industry estimates, less than 3 per cent of new business (approximately ₹300 crore) is transacted online now.
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