After the introduction of the regulatory sandbox in May 2019, the Insurance Regulatory and Development Authority of India (IRDAI) has recently approved several companies, which works on wearable or fitness-tracker applications, short-term insurance services and other technology-driven projects in health, motor and intermediaries insurance, under the sandbox initiative.
The sandbox method is proposed by IRDAI to foster the growth of innovative product companies to provide flexible insurance services to customers, which aligns with regulatory compliance and policyholders’ protection. Under this programme, the approved wearable-tech companies can launch and test a product with a selected group of people for a period of six months (February 1, 2020 to July 31, 2020).
According to a press statement released by IRDAI, out of 173 applications, 33 were approved to carry out the pilot test and launch insurance-based products and services.
Some of the insurtech and insurance companies that got regulatory approvals include Star Health Insurance, Kotak Mahindra General Insurance, Max Bupa Health Insurance, Edelweiss General Insurance, Acko General Insurance, TATA AIG General Insurance, Religare Health Insurance, Reliance General Insurance, and Audatex Solutions among others.
IRDAI Riding The Technology Wave In Indian Insurance
The IRDAI started accepting the applications for its regulatory sandbox initiative from September 15, 2019 to October 14, 2019. According to the insurance regulatory body, the objective of this programme revolves around promoting innovative startups and insurance companies that are adding value to the industry by leveraging emerging technologies like artificial intelligence (AI), machine learning (ML), wearable, internet of things (IoT), blockchain and app-based among others.
Most importantly, this programme offers startups and insurance companies the sandbox environment and relaxation from the existing regulations framework to experiment with the technology for limited scope and limited duration. It also helps the regulators to draft regulatory policy, accordingly.
Sujay Banarji, a member of IRDAI had earlier said that the purpose of this project is to introduce a ‘test and use process’ and help mitigate risk for insurers or policyholders. This will also foster collaboration and further propel interests of the industry stakeholders, including regulators, insurance companies, startups and customers, he added.
Wearable Technology In Indian Insurance Space
The $280 Bn Indian insurance market is going through a rapid transformation at the moment. For a long time now, the insurance space was dominated by banks and government agencies such as Life Insurance Corporation (LIC) and General Insurance Corporation of India (GIC) among others. But now the industry is witnessing a gradual transformation.
With the entry of wearable technology in the insurance space, the technology has moved beyond fitness and wellness tracking to disrupting insurance and finance space. According to global market intelligence firm International Data Corporation (IDC), the wearable device market is expected to double by 2021. With the entry of wearable devices in the insurance space, the market is expected to grow in the coming years.