From October 1, insurance companies will be required to offer the option of issuing e-Insurance policies to customer. The move by the Insurance Regulatory and Development Authority will bring about a major change in the operations of the insurance sector.
In the third and last interview with insurance experts on the issue, FeMoney brings to you the views of S R Balachandher, Company Secretary and Chief Compliance officer, Royal Sundaram General Insurance Co. Following are the excerpts:
Q. What according to you will be the impact of the October 1 shift to e-policies on the insurance industry?
A. For insurance companies, it will improve policy issuance. There will be no more postal delays or repeat courier charges. Turnaround time can be adhered to as instantaneous policy issuance is possible. Management of policies become easier as any change in address, bank details etc. can be made immediately and smoothly with minimum or no paperwork (Go Green Initiative). Renewals become easier for companies to track as currently the major hurdle for better retention is lack of contactability which will improve significantly.
Q. Will consumers benefit from the move?
A. It will help the customer to maintain all policies in a single portfolio. It can help renewal on time. Moreover, KYC is to be done only once. Subsequently, all the customer has to do is only to quote his e-Insurance account details.
Q. Will there be any impact on premium rates?
A. Premium rates may not be impacted immediately but depending on how successful the scheme is, there could be a possibility for a reduction in premium as administrative costs come down for companies over a period of time.
Q. What is the preparedness of the industry and your company for the changeover?
A. There are still some challenges in the form of digital signature of customers on proposal forms. Many customers may not be comfortable to affix digital signatures on proposal forms etc. as there is an additional cost to getting these DSC(Digital Signature Certificate) keys. However, over a period of time we expect the process to stabilize. As an insurer, we are gearing up to this change and we are trying to make the necessary changes to our systems. To sum up, it could be a win-win situation to both customers and insurers provided it is effectively implemented.