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New era of customer centricity awaits as IRDAI lays the groundwork

Since the turn of the century, Insurance Regulatory and Development Authority of India (Irdai) has championed the cause of protecting policyholders’ interests in India. From opening the industry to private participation in the early 2000s to the more recent easing in distribution norms, Irdai has undertaken multiple measures over the last 20 years to bolster growth of the industry and direct it towards customer centricity.

In recent memory, 2022 is perhaps the most significant year as far as insurance regulatory reforms are concerned. Aligned with its vision of ‘Insurance for All by 2047’, the regulator has announced many progressive measures to facilitate wider access to insurance and strengthen customer experience.

These changes will herald a new era of customer centricity and play a vital role in bringing the sector into the same orbit as its global peers. Here are some ways in which the policyholders will benefit in the years to come:

Power of choice: The opening of distribution architecture and increasing the tie-up limits for corporate agents and insurance marketing firms will give policyholders a wider choice of products and the option to choose innovative products that are more aligned with their unique requirements. The relaxation will also strengthen competition, further enabling entities like banks to cater to the requirements arising from geographical uniqueness of customers. It will also help deepen insurance penetration in India.

Speedy grievance redressal: To strengthen grievance redressal, the regulator announced upgradation of its ‘Integrated Grievance Redressal System’ to Bima Bharosa. This renewed platform is aimed at making grievance redressal more efficient. It is also expected that the platform will allow customers to log their complaints in regional languages. Customers currently pursue multiple recourses including social media in case of grievances and there is a wide-spread displeasure over complaint resolution. This platform, monitored by the regulator, will go a long way in building customer confidence in the overall grievance redressal process.

Digitization for superior CX: There has been a clear focus on leveraging new-age technologies to elevate the overall customer experience. Irdai itself is working on use case of data analytics to improve the current grievance redressal mechanism and is also encouraging insurers to follow similar digital solutions when interacting with customers and managing their life cycle.

While initiatives under India Stack like account aggregator framework are already helping insurers make headway on this front, the regulator’s intent to dematerialize insurance policies will also help consumers keep minimal paperwork and maximum convenience.

Just as demat accounts were a shot in the arm for the Indian stock market, dematerialization of insurance policies will elevate the customer experience in the years to come and boost the overall customer satisfaction in the sector.

Single-stop solution for insurance needs: The introduction of Bima Sugam, a single-stop, all-inclusive platform for customers’ insurance needs—from buying to claim settlements —will play a key role in improving transparency and administrative flexibility. It will be linked to all other key platforms like Unique Identification Authority of India (Uidai), National Securities Depository Limited (NSDL), Central Depository Services Limited (CDSL) and more. This will make way for ease of buying, transparency, and trust within the insurance sector.

Irdai has placed strong emphasis on aligning the industry towards the changing needs of India’s life insurance customers. The new guidelines will further make the overall experience for policyholders seamless and sustainable while propelling the industry towards a sustained growth phase over the next decade. Given all the exciting developments, the year 2023 promises to be the start of a great new era for insurance business in India.

Sumit Rai is managing director and chief executive officer at Edelweiss Tokio Life Insurance.

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