Mumbai:
The IRDAI chief has cautioned that with the emergence of insurance depositaries and increasing use of data analytics by the insurers, the data privacy of customers has to be guarded properly.
“ Insurance industry generates huge number of data. Also the insurers’ use of data analytics by the insurers is increasing leaps and bounds now and it is imperative that data security and data analytics go together,’’ said SC Khuntia, chairman, IRDAI at an event organised by Pune based National Insurance Academy(NIA) in Mumbai last week.
Not only such use of data can be extremely useful for general population, also use of telematics will also give people a kind of environment where value of customer protection will be there and number of claims will come down leading to the fall in the premiums. That will help encourage people give more attention to prevention of risk,explained Khuntia.
He also advised the insurance industry to standardise product with comparative features, that will help them to reach out to the customers in a simple way.There is merely 3.69 per cent insurance penetration in the country.Asset under management(AUM) of country’s insurance industry is currently more than Rs 35 trillion which is more than one and half times of total government securities((Rs 23 trillion) the country currently has.
In 2017-18, life insurance grew by 11 per cent, whereas general insurance grew by 18 per cent.With more purchase power of the people, this growth will accelerate in future.In life insurance industry too, protection gap is too high.In Prime Minister Fasal Bima Yojana(PMFBY), only 30-35 per cent of arable area is being insured.In Kerala catastrophe losses, only 2 per cent of households were insured.
“We have enough opportunity to grow. For example, 62 per cent of health insurance expenses are still incurred by the people from their pocket. If insurance industry can make a dent here, then the out of pocket expenses can be protected heavily. We have got enormous opportunity for the health insurance to grow.'' stated Khuntia.
According to him, customer need and confidence are extremely important for insurers and intermediaries. As new technologies are being launched, people’s needs should be catered differently. Insurers should redesign the products depending upon the need of the customers, he said.
“Now, many companies have started selling insurance products like motor insurance online . People should have trust in the entities selling such products.Customer relationship management (CRM) should be the core of insurance activities,’’ he said. .
Insuretech would help insurance industry to develop new products and processes to make experience of customers better. The insurance companies can work with insuretech companies to develop products. These products then can be exported outside country too
“We would like insurers develop technologies so that claim settlement becomes seamless,’’ he observed.
“There should not be any miss-selling.We are not able to provide value to customers. It is not only in the insurance field, but the other value proposition can be extended to other fields too. If insurance agents can tell customers to pay premium in time, then loyalty will continue to remain. We will have to see how to incorporate such practices. All the insurers should develop some good behaviour,'' he suggested
Insurance industry is also going to absorb a large number of personnel. BFSI Sector Skill Council of India has estimated that another 10 lakh people can be employed over next five years though,direct employment may not be there.
“We already have over 20 lakh insurance agents in the country.Technology can’t compete face-to-face transaction. Rather, we can leverage technology to have better face-to-face transaction,’’ he said.
Advising the insurance industry to opt for self regulation, Khuntia said IRDAI would like companies to come up with code of self-regulation so that regulator needn't bother on that aspect. Rather, it should be internally implemented by the insurers themselves.
Irda is also keen on introducing regulations on risk-based capital.A paper to this effect has already been circulated to all the insurers. These companies, who can manage their risks, their need of capital will be less. IRDAI will also focus on risk based supervision afterwards, he said.
“We are dealing with large number of systems so one must keep in mind that disruption should not happen. Indian insurance industry should become robust,’’ he said.