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The Insurance Regulatory and Development Authority of India (IRDAI) that was established in 2000 to look into the regulatory affairs of the industry and promote development of the sector by upholding policyholders' interest has completed 15 years in the country.With both private and public sector making concerted efforts to promote growth and improve penetration, the real winner here has been the customer. This, as insurers agree, has been with the aid of technology that was used not only to make processes simpler but to also make the sale/purchase of insurance easier and quicker.
Penetration and density:
Insurance penetration and density have been the biggest area of concern for the industry. While the industry saw a rise and then subsequent flat rate of growth in insurance penetration, the overall coverage levels are still low:-
With lower rates of renewal and lesser disposable income available to invest, insurers say that the penetration has come down. However, technology will play a vital role in improving these figures.
Penetration in India, which was surging consistently till 2009, has been seeing a gradual decline. However, while life insurance penetration saw a sharper decline, non-life penetration has seen some marginal improvement (from 0.7 % in 2012-13 to 0.8 % in 2013-14), though it still stands below 1 %.
On one hand, sale of insurance online has helped customers to buy appropriate policies assisted with accurate calculators to determine the size of the cover that one should take. On the other, newer channels of distribution like the Common Services Centre s (CSCs) are expected to be helpful to take insurance to the masses. CSCs use computer-aided technology to issue policy documents, payment of premiums and also help in renewals.
Insurance premiums
For the year ended March 31, 2001, private life insurers had earned Rs 7.12 crore of net premiums and the private life insurers were functioning at a net loss of Rs 26.1 crore. Cut to 2013-14 financial year, the private life insurers collected Rs 29510.87 crore new premiums and held 24.5 % market share with respect to new premiums.
During the financial year 2013-14, the life insurance industry reported net profit of Rs 7,588 crore as against Rs 6,948 crore in 2012-13. Out of the twenty four life insurers in operations during 2013-14, eighteen companies reported profits.
Technology has played a vital role in improving new premiums. Tablet selling wherein documents are automatically scanned and payment being done at the click of the button has brought insurance literally to a customer's doorsteps. Compared to a time when policyholders would solely depend on agents to get information on a product, claim or the premium to be paid and would wait at bank branches or insurance company offices for hours to make the payment, all such information is available through applications developed by insurers and can also pay premiums online.
In fact, insurers say that the average ticket-size has also gone up for policies by 20-30 %, since insurance can be purchased online without any intermediary and is therefore cheaper.
Storage of policy documents has also been made simpler by insurance repositories where a policy can be stored in a digital format.
