Karvy's insurance repository business plans to tap its own consumer base

Karvy Insurance Repository has received approval from Irda to become Insurance Repository

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Financial services company Karvy which has launched its insurance repository business, is looking to tap the group's entire customer base of about 350 million and over 400 offices across India. Karvy Insurance Repository (KINREP) has received approval from Insurance Regulatory and Development Authority (Irda) to become an Insurance Repository (IR).

 

The objective of creating an insurance repository is to provide policyholders a facility to keep insurance policies in electronic form and to undertake changes, modifications and revisions in the insurance policy with speed and accuracy in order to bring about efficiency, transparency and cost reduction in the issuance and maintenance of insurance policies. Policyholders have an option to choose to either digitise their policy or to have it in the existing format. 

 

The policyholders can choose one of the five repositories and open an e-insurance account, but they are permitted to open only one e-Insurance account. Five companies have been given the status of insurance repositories by the insurance regulator. The five companies include NSDL Database Management Limited, Central Insurance Repository Limited, CAMS Repository Services Limited, SHCIL Projects Limited and Karvy Insurance Repository Limited. 

 

Insurers have already forged tie-ups with all the repositories. Rajesh Relan, MD & Country Manager, PNB MetLife India said that they have already tied up with all the five players and have started to offer the digitized option to customers and have seen some traction. 

 

Viiveck Verma, Executive Director, Karvy Insurance Repository said, "The repositories will help in cost optimisation for insurers. Apart from our 400 plus branches, we will have 2000 offices through the Approved Persons. Not just Know Your Customer (KYC) norms, the policy servicing also becomes simpler."

 

As per Irda rules, an applicant, to become insurance repository, should be a public limited company with a minimum share capital of Rs 5 lakhs. Further, the net worth of the applicant, on grant of in-principle approval by the Authority, should be at least Rs 25 crore before issuance of certificate of registration to it.

 

These repositories are required to maintain records of e-insurance accounts with an unique number, records of e-insurance policies issued and records of e-insurance policies converted back into physical form, index of policyholders and their nominees / assignees / beneficiaries in the respective life insurance policies, among others. Further, they also have to maintain history of claim data. 

 

While the IRs have only been offering services to life insurers, industry players said that it will be extended to general insurance products in the next 2-3 months.

 

Verma said that KINREP stands at an advantage compared to the other repositories, since they already have the technology bandwidth in place. Karvy has been working with Irda for the past two and a half years to get the structure up and running. Further, they are also in the insurance back-office business for the past five years. The company already has more than 400 employees working on the insurance repository business. 

 

"Not just the customers, the overall persistency in insurance will go up with insurance repositories being launched, since now there will be better access to all policy-related information," he added.

 

KINREP has launched the mobile and tablet applications called POSibilITy (Policy Owner Services with Mobility) for ease of customers. Through this application, a customer view their e-Insurance account and make changes or view statements.

 

Currently, in India nearly 333 million life insurance policies and 90 million general insurance policies are in force and an insurance repository will help in digitising all these documents. According to estimates by Irda and other bodies, Rs 150-200 per customer is spent by an insurance company annually in maintaining policies in physical form. This initiative by Irda is expected to 1800 million pages annually. 

 

Graphic: How an insurance repository works:

 

- A customer goes to a repository website and enters his/her information. An e-Insurance account is created free of cost for the customer (where the insurer pays for these expenses)

-An e-Account number is generated for each customer, which is a unique id. Each user can only open one account.

-All KYC related information is fed into the account. Hence, when he/she buys a new policy, only the e-Insurance account number is to be quoted and no separate KYC document is required.

-All future policy details are immediately sent from an insurer to the insurance repository in a digital format. All payments and policy-details can be viewed on this one common platform by users

-Agents can also view details of policies that they have sourced on this common platform.

-Premium reminders, renewals and other policy-details can be viewed on this platform

-If a customer has some policy-related queries or complaints, the same e-Insurance account can be used to communicate with the insurer

-Each user can have an Authorised Representative who can have details of the e-Insurance account. In case of death of the user, this representative will be able to provide information about the policies.