Irdai explores e-commerce in insurance

Less than 5% of overall insurance industry premiums come from the online channel

The Insurance Regulatory and Development and Authority of India (Irdai) is exploring ways to make insurance popular online via e-commerce. It has formed two groups — comprising life insurers and general insurers, respectively — to look into the opportunities in insurance e-commerce. According to Irdai, insurance e-commerce lower the costs and bring in higher efficiencies and ensure greater reach. This will also leverage the government's Digital India initiative, aimed at creating a digitally empowered society and knowledge economy.

The two groups will identify opportunities of e-commerce in the insurance sector, recommend technological solutions, suggest regulatory and other facilitation measures for growth, and synergise with Digital India initiatives of the government.

“Web aggregators are also being encouraged to add more products online. Discussions are on to find out how to make insurance a pull product on the internet,” said a life insurance official.

At present, both insurers as well as web aggregators sell policies online. However, insiders say it’s term products, motor, travel and simple cashless policies that sell online.

In the life insurance group, the members are Sandeep Bakshi, chief executive officer (CEO) of ICICI Prudential Life; a representative of the Life Insurance Corporation of India; Pramod Khanna of Hero Corporate Services; and Jignesh Gandhi of NSDL Insurance Repositories. Gautam Kumar, deputy director at Irdai, will be the convenor of this group.

The members of the general insurance group are Tapen Singhel, CEO at Bajaj Allianz General Insurance; a New India Assurance representative; Tarun Samant, CEO of Tata Motors Insurance Brokers; and S V Ramanan, CEO, CAMS Insurance Repository. N M Behara, deputy director, Irdai, will be the convenor of this group.

The groups have to finalise the report containing its recommendations within four weeks and submit the same to the Irdai chairman.

“The idea is not only to expand the product category, but also make the platform more attractive for prospective policyholders,” said the chief distribution officer of a private life insurance company.

Currently, only about five per cent of the overall premiums come from the online channel.