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Insurance Regulatory and Development Authority (Irda) chairman TS Vijayan on Monday said the insurance sector thrived upon the segregated data and its analysis for devising the price of a product against a certain risk.
Speaking at the inauguration of the new premises of the Insurance Information Bureau of India (IIB), the single source of insurance sector data and analytics, he said such analysed data would help insurers to justify the premium for an insurance offering.
He raised that many insurance companies do have essential data “but have little respect for it”.
“Even today, when we call for the products to be filed and approved by the Irda, I ask my product team why things are getting delayed. It is because, sometimes, companies had not been able to provide the justification for the price of the product,” Vijayan said.
“We don’t want them to have unjustified pricing... excess premium, too low a premium ... we do not want such things. As a regulator, I expect companies to explain and justify the price for an insurance product.” he said.
As of now, the IIB is providing data analysis in the non-life segment but plans to cover life insurance in the near-term. For value-added and sophisticated data analytics services, it plans to charge a price. “The idea here is not to make profit but to cover the costs incurred,” said R Raghavan, chief executive of IIB.
IIB says the data collected from all sources is fully authentic as it is passed through various entry-level barriers. “We’re in the process of giving a ‘data score card’ for companies so that they can benchmark the standards,” Raghavan said.
The bureau had inked an MoU with Korean Insurance Development Institute (KIDI) for collaborative support in the data analytics, and is open to such partnerships with forums working in Japan, Asean to provide world-class data services here.
In order to overcome infrastructure constraints, the IIB today has moved to a new facility located in Financial District of Hyderabad.
Vijayan said the total insurance premiums (both life and non-life) would cross Rs 400,000 crore in the current financial year.
While the rate of growth in non-life segment was at 16-18 per cent, the life insurance segment was around 10 per cent, he said.
