Digital Shift in Insurance: Insights on E-Insurance Accounts

In a recent notification, insurance regulatory body IRDAI announced that every insurer shall issue insurance policies only in the electronic format irrespective of the mode of application. These digital policies will be tied to a singular electronic insurance account (eIA) in the name of the policyholder. 

Digitization has overtaken India's economic landscape, influencing various sectors and reshaping the way businesses operate. In the context of the insurance industry, this transformation is particularly significant. Let's understand the workings of e-insurance accounts in India and answer what is eIA number.

What is an Electronic Insurance Account?

Electronic insurance accounts are much similar to the demat accounts that most Indians have become accustomed to. It is a centralized digital space that allows policyholders to access and manage their insurance policies anytime, anywhere. Here’s what you need to know to fully understand it’s functioning:

a) eIA number

The electronic insurance account number (eIA number) is a 13-digit unique identification number assigned to an electronic insurance account in India. It is required to log into your eIA a/c, allowing you to view policy details, make premium payments, and manage claims online. 

Even when you choose to switch insurance providers or change your policies, your eIA number remains the same, helping to consolidate your insurance holdings. Once this number has been created, it cannot be altered or modified. Every account holder is also provided with a unique login ID and password for easy access to his/her account.

b) Insurance Repository

A repository is a central location where any data, documents, or resources are stored and managed. In India, the Insurance Repository (IR) serves as the database of insurance policies. Overall, it helps organize and manage all the policies in your name, making it easier to access and share them when needed. 

The four IR entities authorized to open e-insurance account in India are listed below:

> Central Depository Services Ltd. (CDSL) IR

> National Securities Depository Limited (NSDL) IR

> Karvy Insurance Repository Limited

> Computer Age Management Services Limited (CAMS) IR

The Stock Holding Corporation of India Limited (SHCIL) is no longer a part of this list since the year 2015, having willfully surrendered its IR license. IRs cannot sell/solicit insurance policies, their primary purpose being record keeping and data management.

c) Approved Persons

Approved person is an authorized individual appointed by IR to act on customer's behalf. This can be an insurance agent, broker or certain representatives from the repository. This person can also access eIA in the event of the account holder's demise or in their incapacity to access the account.

Now that we know what is eIA number, Insurance Repositories and approved person, we can move forward to understanding the key features of eIA a/c.

Key Features

Beyond convenience, eIAs offer various benefits, enhancing the overall insurance experience. Here are some prominent features of electronic-insurance account:

1) One-Time KYC Upload

> KYC details need to be uploaded only once during account opening. 

> This information is then used in all existing and new insurance policies. 

> Personal information can also be updated whenever required.

2) Free of Cost

> Insurance repositories are paid directly by the insurance companies whose policies are held in the repository. 

> Hence, customers do not have to bear a single penny in charges.

3) Easy Tracking

> Keep track of your insurance renewals and claims.

> Get real-time updates.

> Make online premium payments. Keep records of the same for easy reference.

> Receive relevant details in an yearly statement.

4) One person-One Account

> eIA can be owned by only one person at a time. 

> One person cannot hold multiple e-insurance accounts. 

> Nor can multiple people have the same eIA number.

5) One-stop Destination

> Whether it be health, pension, general or life insurance plans from multiple insurers, all your policies can be safely stored in this centralized platform. 

> This provides an overview of your entire insurance portfolio, improving the ability to make informed decisions in the near future.

> Protects against loss or theft of policies

Account Opening Process

E-insurance accounts can be opened entirely online or with help of an IR approved person. Here's how to open electronic insurance account in 3 simple steps:

1) Pick an Insurance Repository of choice

> One of the 4 authorized IR can be selected to open the eIA.

> Download their eIA a/c opening form from the IR website.

2) Gather Documents Required 

> Passport-size photo

> Canceled cheque

> Any authorized personal identification (Aadhaar, PAN, Voter ID etc.)

3) Submit Filled-out Form

> Fill KYC Details, like personal information.

> Attach your self-attested KYC documents.

> Submit online on the IR website. Else, submit the form physically via an Approved Person appointed by the IR.

All information will then be verified by the insurance repository. If found accurate the account will become active within a week. A person without any active insurance policies can also open an e-Insurance Account. Once the eIA is opened, policyholders can add their existing insurance policy details and the IR will verify the submitted information with the respective insurers before linking the policies to the eIA.

Future Prospects

Rapid digitisation is transforming the way industries operate and interact with consumers. Given that this trend of digitisation in the insurance industry is set to continue, here are some expected scenarios users may find themselves in:

a) Virtual Customer Support

Virtual customer support leverages technology to provide assistance to customers remotely, enhancing their experience while reducing operational costs. Following concepts are gaining popularity in this context:

> AI Integration: With advances in technology, we can expect to see more sophisticated features such as Artificial Intelligence (AI) integration in electronic insurance accounts. With chatbots becoming more common than ever, AI can potentially streamline customer service interactions in the industry by providing quick responses to user queries. 

> Omnichannel Support: Insurers are offering support across multiple channels—chat, email, phone, and social media—allowing customers to choose their preferred method of communication. 

> Self-service: Virtual platforms give customers greater independent control over their policies, claims and documents. This allows for a quick and efficient service.

b) Challenges in Implementation

Although promising, electronic insurance accounts face significant challenges in wide-scale implementation. Here’s a closer look at these concerns:

> Data Privacy: Protecting sensitive personal and financial information is of utmost importance. Incidents of data breach or unauthorized access can erode customer trust.

> Digital Literacy: A considerable portion of the Indian population lacks the necessary skills to navigate digital space effectively. Tailored educational initiatives and support are the need of the hour.

> Cybersecurity: Reports suggest tech-savvy users are no less vulnerable to phishing attacks and fraud. As technology becomes more sophisticated, so are the  attempts. Insurance companies must invest in robust cybersecurity measures to protect user information.

Ultimately, overcoming these obstacles will not only enhance the efficiency of insurance services but also empower individuals to navigate the digital landscape with confidence, paving the way for a more secure and accessible future in insurance.

c) Possible Decentralized Format

Data privacy concerns give rise to the idea of ​​a decentralized digital format. Known primarily as a technology supporting cryptocurrencies, blockchain is a decentralized digital ledger technology that records transactions across multiple computers. It can ensure:

> Security: Each transaction is recorded in a way that cannot be altered retroactively, helping to identify and prevent fraud effectively.

> Transparency: It allows all parties to access the same information. This transparency can foster trust between insurers and customers, as policy details and claims histories can be verified easily.

> Quick Settlements: Digital contracts self-execute terms directly written into code for efficient claims settlement and processing. This reduces settlement times and improves customer satisfaction.

Unlike traditional databases, blockchain is not controlled by a single entity but is distributed across a network of computers (nodes), thereby reducing the risk of centralized control, failure or fraud. Which is why it has been gaining importance in the insurance sector. 

Bottomline

The transition to electronic insurance accounts represents a pivotal change in how insurance policies are managed in India. Embracing this digital landscape will empower policyholders to make informed decisions about their insurance needs, paving the way for a more efficient and user-friendly insurance experience. Find more interesting insight on the future of insurance here. Looking to buy health and term plans? Find your ideal insurance policy with OneAssure experts. Get 100% unbiased objective recommendations. Book a free call now.