CIBIL plans to offer services to insurers

Country's leading credit information provider Credit Information Bureau (India) ltd (CIBIL) is now planning to expand its service to the insurers, both life and general. The data will not only help the insurers during the pricing decision but also the consumers, who will get attractive premium.

Speaking on the sidelines of CIBIL's third annual credit information conference in Chennai M V Nair, chairman, CIBIL said that "we are looking at insurance industry now and started our initial stage of discussion with the insurance regulator".

He noted, the Regulator decided to have a separate bureau for insurance industry, and it  is already in the offing. "We are talking to them (regulator) to use our expertise and our platform".

At present CIBIL caters to financial institutions including Banks, credit card companies, NBFCs, co-operative Banks and any lender in the system. CIBIL got 840 members and number of consumer records process increased to 200 million from 13 million in 2004, said Nair.

The system really picked, for instance delinquency ratio in credit card, one of the important retail products, was at seven% for 90 days plus outstanding but after CIBIL's offerings since 2008 it has now reduced to 1.5%.

This is clear indication that the Banks have started using the information available about the track record of the borrowers they started choosing the borrowers, carefully led the delinquency started coming down.

Huge awareness among the borrowers is another part.

"Unless they (customers) have better score, they may not get a credit card or any other loan, so their is a constant endeavor by the borrower to keep the payment track record so that the score is better".

For example in housing loan in 2010 housing sector those who had score of 700 was around 23% today it is 63% this means the Banking sector started choosing borrowers who have better score.

The natural sequence will be those who got better scores will bargain for better price and this will happen in one or two years.

In a same way, now we are looking at insurance industry. Those who got a good track record will get benefits. "Chances that premium can be attractive also".

For insurers the record will help in pricing decision. "We are yet to work out and yet to develop as we are in the initial stage of discussion with the regulator".