Karvy plans to tap group's resources for repository biz

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

With its insurance repository business, financial services company Karvy plans to tap the group's customer base of about 350 million, as well as its 400 offices across India.

The repository is aimed at providing policyholders an option to maintain policies in electronic form and carry out modifications in policies with speed and accuracy. This would ensure efficiency, transparency and reduced costs.

Viiveck Verma, executive director, Karvy Insurance Repository, said, “The repositories will help insurers optimise costs. Apart from our 400-plus branches, we will have 2,000 offices through approved persons. Not just know-your-customer norms, policy servicing, too, becomes simpler.”

HOW DOES 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, which is a unique ID, is generated for each customer. Each user can open only 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 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 also be viewed on this platform

He added Karvy Insurance Repository had a unique advantage, as it already had the technology bandwidth in place. For the past two and a half years, Karvy has been working with Irda to ensure the structure was ready. The company had an insurance back-office business for the past five years, he said, adding it already had about 400 employees working on the insurance repository business. “Not just customers, the overall persistency in insurance will go up with insurance repositories being launched, as there would be better access to all policy-related information.”

The company has also a launched mobile and tablet application called POSibilITy (Policy Owner Services with Mobility), through which customers can view their e-insurance accounts, make changes and view statements.

Policyholders may choose to digitise their policies or continue with the current format. For an e-insurance account, they may choose any of the five repositories mandated by the Insurance Regulatory and Development Authority (Irda)---NSDL Database Management, Central Insurance Repository, CAMS Repository Services, SHCIL Projects and Karvy Insurance Repository.

Insurers have already forged tie-ups with these repositories. Rajesh Relan, managing director and country manager, PNB MetLife India, said the company had tied up with all the five players and had started offering a digital policy option to customers.

According to Irda norms, to become an insurance repository, an applicant should be a public limited company with a share capital of at least Rs 5 lakh. On grant of an in-principle approval by the authority, the net worth of the applicant should be at least Rs 25 crore.

The repositories have to maintain the records of e-insurance accounts with unique numbers, the e-insurance policies issued and the e-insurance policies converted into physical form, as well as the index of policyholders and their nominees/assignees/beneficiaries. These also have to maintain a history of claim data. While currently, the repositories cater only to life insurers, industry officials say the services would be extended to general insurers in two-three months. India has about 333 million life insurance policies and 90 million general insurance policies. According to estimates, insurers spend Rs 150-200 a customer annually in maintaining policies in physical form.