The Insurance Regulatory Development Authority of India (IRDAI) is looking to incorporate video-based know your customer (KYC) verification of customers looking to buy insurance products.
The body has released draft guidelines with the insurance companies, seeking their feedback on the same. Once the feedback is processed, the body will release the final guidelines soon, a Moneycontrol report citing a top executive at an insurance company.
IRDAI, in a letter to insurance companies, said that the process will be undertaken by an official of the insurer through a consent-based audio-visual interaction with the customers. The video KYC will be permitted for both life and general insurance companies. The process will also enable complete digitisation of the insurance buying experience.
However, the regulator has warned that the whole process will need to be audited properly, and all security protocols will have to be strengthened to ensure that there is no scope of fraud. Further, the letter elaborated that geo-tagging of the customers’ location will be mandatory so that the location of the customer can be finalised and every video call will originate from the insurance company’s domain only.
The development comes after the Reserve Bank of India (RBI) approved video KYC, in January 2020, to simplify bank account opening. The apex bank had also advised the entities to ensure that the video recording is stored in a safe and secure manner and bears the date and timestamp. It also encourages them to take the assistance of the latest available technology, including artificial intelligence (AI) and face matching technologies, to ensure the integrity of the process as well as the information furnished by the customer.
According to an IBEF report, the gross premium collected by life insurance companies in India increased from $39.7 Bn in FY12 to $94.7 Bn in FY20. Between FY12-FY20, the premium from new business of life insurance companies in India increased at a CAGR of 15% to $37 in FY20. Overall insurance penetration (premiums as % of GDP) in India reached 3.69 $ in 2017 from 2.71% in 2020.
Some insurance companies in India are Bajaj-Allianz General Insurance, Bharti AXA General Insurance, Digit Insurance, HDFC Ergo General Insurance, ICICI Lombard General Insurance, IFFCO TOKIO General Insurance, New India Assurance, Reliance General Insurance, Religare General Insurance and TATA AIG General Insurance.
Besides this, some startups serving in this segment are Acko, Mantra Labs, Policy Bazaar, Toffee Insurance, Coverfox, InsureFirst and others.