When covid-19 hit the world in a way no one could have predicted, digitization began to take place across all sectors to deal with the pandemic. Amid these changes, insurance benchmarks have emerged as a boon to the insurance industry, making e-insurance easier. They made it easier for people to follow policies on a platform and make corrections online if needed.
In India, an insurance benchmark, the first of its kind in the world, was launched on September 16, 2013; it is an insurance policy database. The Insurance Regulatory and Development Authority of India (Irdai) initially issued a certificate of registration to the following entities to act as insurance repositories: NSDL Database Management Ltd, Central Insurance Repository Ltd, SHCIL Projects Ltd, Karvy Insurance Repository Ltd and CAMS Repository Services Ltd. In September 2015, SHCIL Projects Ltd relinquished its insurance repository license, which brings the number down to four at present.
Amid the covid-19 pandemic, standards of social distancing, and the paradigm shift towards online business operations, insurance repository services have helped people hold insurance plans in the form of mat. You can keep your insurance policies in an electronic insurance account (eIA) with an insurance repository. Even if you have policies from more than one insurance company, they can be stored in the same account. Each eIA will have a unique account number and each account holder will be assigned a unique username and password to access it.
The Covid-19 has had a huge influence on insurance markets around the world. According to an insurance markets report released in June by the Organization for Economic Co-operation and Development (OECD), insurance companies experienced a slowdown in gross premiums written in 2020, especially in the insurance sector. life insurance.
They said that on average, non-life insurance premiums increased 1.2% in 2020, while life insurance premiums declined 2.2%. Interestingly, insurers’ assets remained mostly invested in bonds and managed to make a positive gain despite the odds.
Although insurance repositories have been around since 2013, it wasn’t until the pandemic hit that people realized its advantages over traditional brick-and-mortar insurance.
First, by being stored in electronic form, one does not have to worry about the risk of losing the physical document. Also, it is easier to follow all policies because everything is stored on one platform. In addition, one gets a dashboard view of all the policies held and also sees on a calendar the premium payments related to the different policies held. This helps the policyholder to plan better in terms of ensuring a fair cash flow. In addition, all types of policies, namely automobile, health, etc. may be subject to the same eIA.
In the event of the premature death of the policyholder, the eIA allows the heir or beneficiary of the person to access all policies from a single account and then initiate the process to obtain the benefits. of the deceased released. With covid protocols in mind, accessing everything from the comfort and security of your home is the best practice. Paperwork is also reduced and updating and changing your personal information becomes faster and hassle-free. The repositories have ensured that all of these facilities are offered to their customers hassle-free.
In addition, the fact that it costs nothing to open an eIA or to keep the services in the form of a demat makes it more attractive. The only thing to do is to fill out a conversion request form and submit it to the insurer, which will then be saved by the respective repository. Custodians guarantee interest and ensure fair treatment of policyholders by acting as a one-stop-shop for policy servicing.
It will be interesting to see how insurance benchmarks evolve into the new normal. The profitability of insurance benchmarks will largely depend on the performance of their financial investments, which is again linked to changes in financial markets and inflation rates.
Ramkumar K. is Chief Business and Operations Officer, CDSL.
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