Digitisation of insurance policies picking up gradually

“The business volumes have increased in the last six months owing to IRDAI’s (Insurance Regulatory and Development Authority of India) decision asking the life insurers to digitise all policies received in digital format,” its CEO SV Ramanan said. 

Noting about 2.5 cr life insurance policies (1.5 crore by LIC and one crore by private life insurers) and about 12 crore health and motor policies are sold by non-life insurers in India annually, he said there is a long way to go for the repositories as only 12 lakh life insurance policies are in digital format till date. But the good news is that the business is slowly growing, he added. 

“While average cost for a life insurer for maintaining a policy in a repository is about Rs 40 per year, it is Rs 10/year for a non-life insurer in respect of health and motor insurance policies,” Ramanan said. 

NSDL, CDSL, CAMS and Karvy are the four insurance repositories in India. Insurance repositories keep the policies in digital or demat form like company shares. Ramanan said a life insurer spends around Rs 150 per policy on its maintenance in traditional/paper format and opting for digital format is a major cost saver for them.