Insurers gear up to roll out eKYC facilities as COVID-19 curbs mobility

The Insurance Regulatory and Development Authority's (IRDAI) recent nod to allow paperless Know your Customer (KYC) formalities using Aadhaar card data has evoked a cheer from insurers. In the first phase of the timely order, which comes amidst the COVID-19 pandemic, twenty-nine insurers have been allowed to have an eKYC process using the Aadhaar Authentication Service of the Unique Identification Authority of India (UIDAI) including Bajaj Allianz Life Insurance, Kotak Mahindra Life Insurance, IDBI Federal Insurance, SBI Life Insurance and SBI General Insurance, amongst others.

Rikhil Shah, CFO, SBI General Insurance said it planned to offer the facility to consumers by late Q2 of FY21. He's confident that the facility was a big enabler from both the KYC as well as from a customer experience perspective. SBI General Insurance also said that eKYC would help to “identify our Customers uniquely, building their persona and offer them right protection solutions,” The insurer added that in the future, it believed that eKYC, and full KYC for all General Insurance sales would become a norm. “This will help the country take a step ahead in financial discipline and governance,” said the company whilst also adding that “the other upside is a huge benefit to our Customers in their experience while buying insurance through off-line and digital journeys.”

IDBI Federal Life Insurance is also gearing to roll out the facility by early July. Ameet Das, Head -IT & Digital at IDBI Federal Life Insurance, said eKYC would bring about system efficiencies as the customer would no longer need to submit a physical copy of the KYC documents. He added that “It opens up several other avenues for enhanced customer experience – auto-population of proposal forms, e-signature for service request and so on. While this will definitely be helpful during the coming months of continued social distancing and movement restrictions, it will become the norm even beyond that,” From a company perspective, eKYC would help insurance companies “to reduce their turnaround time for service-related issues as well as processing of New Business,” noted Das.

Other insurers spoken said they had approached UIDAI in order to gain access to the Aadhar Authentication Service, following which they would proceed on rolling out the facility as well. Insurers are optimistic on the aspect of the Aadhar card integration as it would not only make documentation easier, but also increase penetration. This has to be supported by distribution outreach especially through digital platforms, as mobile penetration is also significant in our country.

Data from the IRDAI reported a large decline amongst life insurers’ business premium for the month of April 2020, which was Rs 6278 crore in comparison to Rs 9928 crore in the previous year. CARE ratings in a report attributed this to the government imposed lockdown due to the COVID-19 pandemic, whilst also noting that increased awareness could see a rise in protection plans.

Source: The Economic Times