Page 32 - Insurance Times December 2021

helped change the perception of insurance among policyholders a comprehensive oversee of their holding
millennials. The perception that insurance was complicated which in turn is hypothesized will lead to more product
and involved a lot of tedious paperwork is fast being innovation since policy management for the holder is now
replaced by the easy access and processes of these app- seamless and easy. Policyholders are therefore more likely
enabled InsurTech companies. to take up newer products based their need.

Insurance Product Innovation - the India Conclusion:

example with IRDAI as a Partner Innovation is crucial to all organizations in order to survive
the multitude challenges of operating in a volatile and
In India, the insurance market is likely to reach the 280 uncertain world. While roadblocks and risks are present in
billion USD thresholds by 2020 as per the Indian Brand Equity
innovation, the pace of innovation needs to be accelerated
Foundation (IBEF). Insurance Innovation is thriving due to in Insurance if it is to meet the needs of the consumer and
IRDAI (Insurance Regulatory and Development authority of
be future-ready. At the centre of all innovation should be
India) partnering with the industry as a champion of
the quest to satisfy each consumer and improve consumer
Innovation. Significant measures taken by IRDAI recently
experience.
that have hastened innovation are:
Y The Regulatory Sandbox: In order to increase the pace Today, insurance stands at the crossroads of the Fourth
of innovation in companies, on 26th July 2019, IRDAI Industrial Revolution and can reap the digital dividend if
issued a regulatory sandbox approach. The motive for insurers implement a digital strategy. Leveraging Insurance
this approach was to create a conducive and safe Platforms, Ecosystems and partner networks can bring a
environment within the framework of which insurance scale to all product innovation. Ensuring consumers by
companies could introduce innovative products. IRDAI having many interaction touch points that bring not only the
also published guidelines for the innovative products that product but also increase the ways in which consumers can
could be brought forth within the regulatory sandbox participate through telematics or connected apps to reduce
approach. About 173 proposals for innovative products their premiums is the need of the hour. InsurTech companies
encompassing different areas of insurance were are using technology to disrupt the traditional approaches
received by IRDAI and some of these were approved and this is encouraging innovation. Innovation flourishes
for introduction and testing. Significant innovative when a conducive and safe environment that allows for
products are V-Pay Motor Insurance, Parametric experimentation is available. A strong champion like the
Insurance among many others. regulator, IRDAI, is also fostering an ecosystem making
innovation the byword for all insurers today.
Y Allowing Life Insurance companies that have completed
10 years to launch Initial Public Offerings to raise capital
which again brings in innovation due to availability of Despite the macro headwinds of trade wars, falling interest
funds. rate regime, and now the COVID-19 contagion, insurers are
moving ahead to stay responsive, nimble and agile in
Y Insurance products are also covered under the exempt bringing new offerings and innovative products that can
exempt exempt (EEE) method of taxation making them bring policyholders the peace of mind and financial
attractive. This is likely to foster a climate of innovation independence they desire. Arguably, the most important
in insurance as newer products can be introduced and part of innovation is the ability to foresee the future, create
qualify for tax exempt status. and imagine what could bring the most value and then have
Y Helping to increase FDI (foreign direct investment) to the grit to implement the new change. The cycle of
100% for insurance intermediaries like brokers, innovation usually brings all companies to the same place
insurance companies etc. This liberalized FDI is expected they started from,in the realization that at the core of their
to increase best practice sharing and investments in transformative journey is their customer - a satisfied
digital leading to a faster pace of innovation. policyholder. Improving customer experience is something
that will, despite all future innovation and product

Launching of the Insurance Repository (2013) that allowed development by insurers, always remain as the most
policyholders to buy and keep insurance policies in a important metric.
dematerialized (electronic) form is another step that fosters
innovation. This translates into all policies to be stored References:
together in an electronic account (aka eIA). This allows From various sources. T

32 The Insurance Times, December 2021