‘Customers should be free to port policies’
The insurance regulator is keen to allow portability of policy or giving customers the freedom to shift their in-force policy from one insurer to another as such a move will help improve service levels in the industry.
“Digital technology has allowed insurance companies to personalise the product,” Insurance Regulatory and Development Authority of India (IRDAI) Chairman T.S. Vijayan said at the 45th Skoch Summit here on Thursday. “Our aim will be that not only personalisation, ultimately the customer should be able to transfer a policy from one insurance company to another if he is not satisfied with the services.”
Various conditions ought to be in place prior to introduction of portability, starting with simple and standardised policies. Hence, the issue needs to be discussed openly, he said, adding that portability was available only for health insurance policies at present.
Mr. Vijayan said that he was merely floating the idea and IRDAI has not prepared any road map with regard to allowing portability for other policies. “Let people think about… want to ignite the process,” he said, adding digitisation is the first step towards portability.
The regulator, he said, expects insurance companies to introduce e-policies, as an option for the customers, from October 1.
To a query, he said IRDAI had received 7-8 applications from reinsurance firms seeking permission to establish branches. The regulator, which expects over 15 such branches to be opened this year, is likely to issue licences by December.
Low penetration
New India Assurance Company chairman and managing director G. Srinivasan said insurance penetration levels remain low in the country, with less than 3 per cent of home owners opting for the cover and 40-50 per cent of the motor vehicles plying on the road not insured.
One way of improving the level was for the insurance industry to make the processes and procedures simple besides removing the trust deficit.
The industry consists of 52 insurers with 24 in life insurance and others in non-life.
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