Bima Stack promises seamless insurance claims, better access for all

Bima Stack makes purchasing insurance simpler, speeds up claims and strengthens access to products. It gives people control over their data

The insurance sector is at a critical juncture. Despite impressive growth in premium income – from Rs 1 trillion in FY05 to more than Rs 6.7 trillion in FY24 – the sector has yet to fully realise its potential in terms of broader penetration and improved customer satisfaction. The Insurance Regulatory and Development Authority of India (Irdai) is transforming the industry by leveraging technology to overcome challenges.

 

The Bima trinity – Bima Vistaar, Bima Vaahaks and Bima Sugam – incorporates a technology framework that may be referred to as Bima Stack. Much like how India Stack transformed payments, Bima Stack has the potential to revolutionise the way insurance is sold and claims are processed.

 

Availability, accessibility and affordability have been persistent challenges in the insurance sector. Bima Stack, by leveraging Aadhaar, electronic know your customer (e-KYC), DigiLocker, and Unified Payments Interface (UPI), will simplify insurance purchase and reduce costs while improving availability and accessibility. For instance, by integrating Aadhaar-based authentication and e-KYC, insurance providers can streamline the policy issuance process, eliminating the need for extensive paperwork or physical verification.

 

The vast majority of Indians do not have access to clear and reliable information about insurance products. Only around 10 per cent of the population understands English language content, leaving most people reliant on offline and unverified channels. Bima Stack could address this by tapping into platforms like BHASHINI, India’s digital public infrastructure for language translation.

 

One of the most critical pain points in the insurance journey is the claims process. Bima Stack will fundamentally change this by creating a seamless and consent-driven claims ecosystem. Imagine a scenario where a policyholder goes to a hospital and presents their Aadhaar card. The hospital’s system is connected to an insurer, which leverages components of Bima Stack to verify policy details and approve the claim. This process not only alleviates the stress for consumers in a crisis but also fosters a sense of trust in the insurance system.

 

The structure of Bima Stack:

 

> Consent and cashless layers: At the heart of Bima Stack is a ‘consent layer’ powered by the account aggregator framework and allowing consumers to securely share their KYC, health records and other personal data with explicit consent. Complementing this is a 'cashless layer’, inspired by UPI’s seamless payment system and enabling consumers to make premium payments and receive claim payouts.

 

> Paperless, presence-less: All policy documents, health records and personal data could be centralised in DigiLocker.

 

> Auto-intimation layer: This component will ensure that insurers are automatically notified of life events such as hospitalisations or deaths.

 

> Artificial intelligence: By integrating AI-powered language translation tools like BHASHINI, Bima Stack will make insurance information accessible to non-English speakers, reducing misinformation and expanding the market to underserved populations.

 

Bima Stack is poised to do for insurance what UPI did for payments. It simplifies insurance purchasing, makes claims processing faster and transparent and increases access to affordable products. Most importantly, it will empower consumers to take control of their data.

 

Irdai chairman Debasish Panda has said that by 2047, when India turns 100, the country should be fully insured, meaning coverage for life, health, personal accident, property and all enterprises. Bima Stack can be instrumental in achieving this vision. India’s insurance sector stands on the brink of revolution, and Bima Stack holds the key to ushering in a new era of growth, inclusivity and security for every citizen.

 

The writer is joint group CEO, PB Fintech. Views expressed are personal. This column has been edited for length