Innovation and Digitisation: Navigating regulatory shifts in the insurance ecosystem

Regulatory reforms and product innovations in every vertical of insurance are setting the wheels in motion for widespread adoption. As these forward-thinking reforms take root, the vision of a fully insured Bharat no longer looks like a distant horizon

Updated: Jun 19, 2024 04:51:50 PM UTC
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Regulatory support is the lifeblood for any industry to break new ground and progress. For the insurance industry, IRDAI's consumer-centric initiatives and the inspiring vision of 'Insurance For All by 2047' fuels innovation. This goal calls for all gears in the insurance machinery to work in perfect harmony. Picture this: A future where every Indian has access to insurance, the complexities of policies are simplified, and filing a claim is not accompanied by apprehension.

The change is already visible through trailblazing reforms transforming the insurance landscape. Keeping up with evolving consumer demands in this digital era, IRDAI is setting the stage for a revolution in the way insurance operates in India. The latest master circular in health insurance is one example that has breathed life into the claims process. It ensures that health insurance goes beyond being a mere contract to being the lifeline when an individual needs it the most. Regulatory reforms and product innovations are also addressing inclusivity in insurance coverage. Policies are being designed to cater to senior citizens, individuals with pre-existing diseases (PEDs), and the "missing middle"—those who are often excluded from conventional insurance products.

Digitisation in every vertical of insurance is setting the wheels in motion for widespread adoption.

Streamlining processes and enhancing accessibility

The digital age of insurance is here, and how! These recent reforms revolutionise the entire customer journey—from the moment you consider a policy, to the day you file a claim. Imagine being able to file a claim from the comfort of your own home, receive updates in real time, and have your claim processed swiftly, thanks to the online submission and digital payment methods. It's like having insurance at your fingertips, making the whole process smoother and more satisfying.

Adding fuel to the momentum is the introduction of the National Claims Health Exchange—a pioneering platform set to bring insurers and healthcare providers together under one digital roof. This exchange will not only boost transparency and efficiency but also ensure faster claim settlements and fewer glitches for every stakeholder involved. That's not all. With mandates like online policy issuance, e-KYC, and digital onboarding, manual delays and chaotic paperwork are already behind us. Since digital penetration has reached the length and breadth of India, buying a policy has never been easier or more secure, even in remote areas. It's a win-win situation for the industry and the policyholders alike.

The regulatory body actively supports industry stakeholders through a dedicated facilitation cell and regular open houses. These initiatives are designed to offer assistance, facilitate better communication, and improve the sector's overall welfare.

Regulatory reforms and consumer protection

Regulatory reforms are the backbone of consumer protection and trust-building in the insurance sector. IRDAI's proactive stance in introducing measures that promote transparency, fairness, and security has been pivotal in this regard. One standout initiative is the implementation of 'Cashless Everywhere', which makes health coverage more accessible and convenient. Individuals often break into savings or borrow from various sources to fund upfront treatment costs. Cashless Everywhere will alleviate this financial burden for them.

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Yet another pain point is complexity in insurance, which IRDAI addressed with two initiatives—Customer Information Sheet and the extension of free look-up period. While the former simplifies complex policy wordings, the latter lets you cancel your policy within 30 days if you are not satisfied with your choice. Additionally, products are increasingly being developed to cater to a range of demographics—from Millennials and Gen Z to senior citizens—with a slew of consumer-centric guidelines.

And it's not just health insurance feeling the winds of change. With the insurance sector going digital, cybersecurity has become a top priority. Enhanced norms ensure that your sensitive data remains safe and secure, with comprehensive frameworks and protocols in place. Similarly, the introduction of the data-blind account aggregator framework allows you to securely share your financial data with insurers, enabling personalised offerings while keeping your information protected and accessible.

Expanding coverage and services beyond boundaries

The rural areas and Tier II and III cities have been bereft of the insurance umbrella for the longest time. But now, with digital platforms reaching even the most remote corners, insurers are crafting tailored products to meet the unique needs of these regions. Mobile apps and digital platforms make simplified and affordable policies accessible like never before. Our research has also indicated that the propensity to renew and purchase protection products—health and term insurance—from Tier II and III cities is even higher than Tier I.

However, it's not just about policies; it's about access to healthcare, too. Telemedicine is emerging as a lifeline, and so is its extension in insurance. This not only expands the reach to smaller regions but also takes it beyond Indian borders to the NRI diaspora. Digitisation has eliminated the need for physical formalities and enabled the purchase of high-ticket policies virtually for this consumer segment.

As these forward-thinking reforms take root, the vision of a fully insured Bharat no longer looks like a distant horizon but a reachable reality. It promises a future where insurance is a fundamental right, not a privilege, for every Indian citizen.

Yashish Dahiya is the co-founder of Policybazaar Group of Companies.

The thoughts and opinions shared here are of the author.

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