When Covid-19 hit the world in ways that no one could predict, digitization began in every industry to help tackle the pandemic. In the midst of these changes, insurance repositories have proven to be a boon to the insurance sector as they make e-insurance easier. They made it easier for people to follow guidelines on a platform and make corrections online if necessary.
The world’s first insurance repository was launched in India on September 16, 2013; it is a database of insurance policies. The Insurance Regulatory and Development Authority of India (Irdai) initially issued a certificate of registration to the following entities to function as insurance repository: NSDL Database Management Ltd, Central Insurance Repository Ltd, SHCIL Projects Ltd, Karvy Insurance Repository Ltd, and CAMS Repository Services Ltd. In September 2015 SHCIL Projects Ltd gave up its license for the insurance repository, so that the number is currently reduced to four.
Amid the Covid-19 pandemic, social distancing norms, and the paradigm shift to doing business online, insurance repository services have helped people keep insurance plans in demat form. You can keep your insurance policies in an electronic insurance account (eIA) with an insurance archive. Even if you have policies from multiple insurance companies, they can be stored in the same account. Each eIA has a unique account number and each account holder is given a unique login ID and password to access it.
Covid-19 has had a massive impact on insurance markets around the world. Insurance companies saw a slowdown in gross written premiums in 2020, particularly in the life insurance sector, according to a report on insurance markets by the Organization for Economic Co-operation and Development (OECD) published in June.
They said that non-life insurance premiums increased by an average of 1.2% in 2020 while life insurance premiums decreased by 2.2%. Interestingly, most of the insurers’ assets remained invested in bonds and were able to generate a positive profit despite all the adversities.
Although there have been insurance deposits since 2013, it was only with the onset of the pandemic that people realized their advantages over traditional inpatient insurance.
First, when storing in electronic form, there is no need to worry about the risk of losing the physical document. Plus, it’s easier to keep track of all guidelines as everything is stored on a single platform. In addition, you get a dashboard view of all the policies held and also see the premium payments for the various policies held in a calendar. This helps the policyholder plan better to ensure fair cash flow. In addition, all types of policies, ie automotive, health, etc., can be kept under the same EIA.
In the event of the premature death of the policyholder, the eIA enables the person’s heir or beneficiary to access all policies from one account and then initiate the process to release the deceased’s benefits. With the Covid protocols in mind, the best course of action is to have everything convenient and secure from your home. It also reduces paperwork and makes updating and changing your personal information faster and easier. Repositories have made sure that all of these facilities are easily offered to their customers.
In addition, the attractiveness is increased by the fact that the opening of an EIA or the provision of the services in demat form does not incur any costs. All you have to do is fill out an application form for the conversion and submit it to the insurer, which will later be kept by the respective depository. Depots guarantee the interests and fair treatment of policyholders by acting as a central point of contact for policy management.
It will be interesting to see how insurance registers develop in the new normal. The profitability of insurance custodians will largely depend on their financial investment performance, which in turn is linked to developments in financial markets and inflation rates.
Ramkumar K. is CDSL’s Chief of Business and Operations.
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