Insurance Regulatory and Development Authority of India (Irdai) has come out with the exposure draft on selling and servicing insurance policies through the e-commerce platform.
Insurance Regulatory and Development Authority of India (Irdai) has come out with the exposure draft on selling and servicing insurance policies through the e-commerce platform. Insurance players believe that this move could help the insurance industry reach out to more investors and can reduce cost to investors who buys policies through e-commerce platform.
The draft defines participants who can set up the Insurance Self-Network Platform. These include entities granted certificate of registration by insurance regulator such as insurers, insurance intermediaries, insurance agents and any other entity recognized by the Authority. Irdai in its exposure draft stated that, “The Insurance Self-Network Platform will undertake Insurance e-commerce activities in India such as selling and servicing of insurance products.”
Industry participants also say that, one of the important points in the exposure draft is also related to the pricing where Irdai has allowed insurers to offer differential pricing for the same product when sold through the Insurance Self-Network Platform. “Pricing of every product shall be decided by the insurer and it shall be the responsibility of the insurer that product pricing is in compliance to product filed with the Authority,” said Irdai.
“We welcome this move as it will help to increase the insurance penetration in the country. Given the fact that the country is moving to 4G networks and digitisation of financial services, this will help to strengthen the infrastructure for selling financial products. The insurance players will be able to provide value added services to their customers in a cost-effective way,” said Sharad Mathur- Senior Vice President & National Head – Agency, Digital & Alternate Channel at SBI General Insurance.
Irdai has also stated that, products sold through the Insurance Self Network Platform shall be entitled to commission or remuneration as specified under the IRDAI Regulations, 2016. “This move will facilitate ease of entry for distributors to get onto digital platforms. Companies can benefit by creating a large network of digital touch points, building more transparency and reach for distribution. This also means that insurance companies will have to be ready to undertake multiple integration’s in a short span of time,” said M Ravichandran, President-Insurance of Tata AIG General Insurance.
The exposure draft also says that, “Creation of an e-insurance account shall be mandatory before selling insurance policies on the Insurance Self-Network Platform. It shall be necessary for a customer to have an email id while transacting insurance business on the Insurance Self-Network Platform.” K.G Krishnamoorthy Rao, MD and CEO at Future Generali India Insurance says, “Its very good for the investors as prices might be cheaper on e-commerce platform and there will be dematerialisation of insurance policies. This will also help insuranceindustry expand more.”