Insurance today has come a long way from being just an instrument of pooling resources that could be re-distributed in times of calamities such as fire, floods, epidemics, and famine in earlier centuries. While the definition remains more or less the same, insurance has seeped into the lives of every financially associated individual or institution as an ultimate protection cover.

With the unfortunate domino effect of Covid-19 acting severely on the health and financial lives of many, Life and General insurance segment has picked up a steep pace as more and more people move rapidly towards securing a financial safety net for themselves. While life insurance sector witnessed a premium income growth of 10.16% over the last year, of which market share of private insurers increased to 38.20% since 2021, general insurance industry underwrote total direct premium of 2.21 lakh crore in 2021-22 alone, confirming the high priority people are placing with insurances in these unpredictable times.

And since it is an institution that holds a large quantum of monetary resources, it has always been a prime target for money laundering and fraudulent activities. And to continually combat malpractices, the insurance sector has always been heavily regulated. Insurance Regulatory and Development Authority of India (IRDAI) has over the years been in step with the dynamic insurance environment and has introduced several policies, circulars and regulatory addendums that attempt to plug in such gaps.

Even in this highly technical age of digitization, insurance verification has only come far till a video-based identification, where even till today, the required Know Your Customer (KYC) documents are majorly handpicked by agents from policy holders residences. This form of document verification and collection is a comfort factor for many policy seekers even today, having a personal interaction with experienced agents to handle their insurance affairs. But unfortunately, it also leaves room for enormous manipulation of private records and malicious use of personal data information for fraudulent purposes.

A hard look into the reason why there is a rise in the number of frauds and the ingenious methods exercised by scammers will uncover the challenges that the current KYC process is grappled with. Insurance companies that have been around for decades still operate largely as per their traditional legacies. It is one of the most dominant reasons for the lower rate of digital adoption amongst insurance companies.

Is it high time for Indian insurance companies to restructure their operations into a technology enabled enterprise? Let’s take a look.

2021-22 saw a steep 45.46% of new policy creations and sharper 54.54% renewal of premiums by life insurers. Within general insurance, the health segment boasted of the largest growth of 26.27% in 2021-22 with a market share of a massive 36%, followed closely by the motor sector with a market share of 32%.

Taking the premium revenue tally together for both life and general insurance, it stands at a whopping 9.14 lakh crores. People duly put their faith and hard-earned money into these insurance houses, be it public or private insurance firms, to safeguard their future from unforeseen situations. Yet IRDAI identified and reported 1.34 crore fraud grievances registered with them this year to the tune of 42,766 crores. Most of these grievances stemmed from frauds that were committed due to document malpractices and agent misappropriations.  

It is indeed the need of the hour for the insurance houses to go paperless. Their legacy operational models need serious restructuring, fitting in line with new age digital solutions developed by Fintech firms, while remaining compliant within the ambit of regulatory bodies.

To propel the digital adoption within the insurance gambit, IRDAI introduced guidelines on Anti-Money Laundering/ Counter Financing of Terrorism (AML/CFT) that would come into force by 1 st November 2022 for the Life and General insurance sector. But upon requests from several insurances houses to allow time for business remodeling, the timeline has been extended to 1st of January 2023.

According to the guidelines, insurers will have to follow stringent Customer Identification Procedures for their policy holders and seekers, while establishing a client account that helps monitor every transaction. While the general insurance sector was previously not considered by the regulatory body to introduce mandatory e-KYC for their policy holder base, even this segment will have to adhere to e-KYC norms by 1 January 2023 as per the latest IRDAI guidelines.

Currently, the following forms of KYC are followed:

  1. Aadhaar based KYC through Online authentication
  2. Aadhaar based KYC through Offline authentication
  3. Digital KYC as per Prevention of Money-Laundering rules
  4. Video based identification process
  5. CKYC: KYC documents from CERSAI’s registry (Central Registry of Securitization Asset Reconstruction and Security Interest of India)
  6. Submitting Officially Valid Documents- OVD, along with PAN/Form 60.

To fully comply with the latest IRDAI guidelines, insurance houses are mandatorily required to go paperless and touchless, live on a digital platform by 1 January 2023.

To actively combat insurance fraud and keep people’s trust alive, insurance firms must embrace digital disruptions to take safety steps and protect their valuable money. Going touchless is a significant attempt by IRDAI to mitigate the challenges faced by insurance houses on a daily basis.

  • Delayed response and resolution for customers
  • Errors in documentation
  • Inconvenience of manual travel
  • Poor customer experience
  • Incorrect policy issuances and more
A Paperless, Touchless, Effortless Digital KYC Journey with Perfios for all Insurance Houses

Experience an end to end, fully automated digital KYC journey with Perfios, helping your customer with a personalized, paperless and touchless onboarding experience. Every channel is designed to withhold the highest form of security and is 100% reliable. 

To accurately authenticate genuine policy holders and renewals, ingenious AI/ML based data engines have been designed to conduct multiple levels of checks while onboarding a life insurance customer:

For Individual Term Holders

  • CKYC - Silent Mobile Auth
  • Profile (PAN Profile)
  • OCR
  • AML Check
  • Liveness / Face Match
  • PIVC - Account Aggregator
  • WhatsApp journey

For Group Term Holders

  • KYC of entity & Directors

Enabling the digital application, you can:

  • Seamlessly onboard your customers online from any desired location
  • Real-time KYC documentation for customer in compliance with updated regulatory guidelines
  • Maximized convenience of paperless and touchless KYC documentation including e-signature, PAN profiling, photo capture and upload, video KYC set up and more
  • Explanatory digital onboarding process over email and real-time responses from online KYC agents

Why Perfios?

The Insurance product suite by Perfios is power-packed with ten tech-enabled features, delivering the best onboarding experience for your customers:

  • Personalized, end to end, fully automated experience
  • Multiple levels of encryption to ensure highest levels of data security
  •  Seamless onboarding for new applicants
  •  Easy to install, low code application for Insurance firms
  •  Low attrition costs
  •  Easy to use application for customers with assisted help from online agents
  •  Improved transparency and heightened compliance
  •  Increased and accelerated customer conversion rates
  •  New and improved background validation checks
  •  Real time detailed customer profile and segment wise reports
About Perfios

Perfios is the leading SaaS based company of India that specializes in extracting, categorizing, and analysing thousands of datatypes in real-time, helping financial institutions take lending decisions in stringent privacy and compliant environments. Going beyond being just a data aggregation and analytics company, Perfios has skillfully aligned its decade worth of experience and expertise to successfully develop multiple product lines powered by its in-house state-of-the-art AI/ML based data engines.

To know more, write to us at info@perfios.com

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