We are going to talk about Bima Sugam which is still in the planning stage and will be implemented soon. What kind of a marketplace are we talking about or what kind of platform? It is known to be a one-stop solution for all your insurance related queries, claim settlement or even for buying the insurance you want, be it health or life. So are we looking at a wholesome product or platform which solves all your needs related to insurance?
Yes that is the vision that has been set out by the regulator IRDA which is driving this initiative. This will be more like an Amazon kind of a platform where everybody can come together that is the insurance companies, the brokers or the customers. There can be buying and selling of products and after-sales service in the form of policy issuance. There will be a facility for storage of policies, lodging claims and dispute resolution. This is going to be a one-stop solution for all the needs related to insurance.
We are already looking at a lot of marketplaces for buying insurance. How different will Bima Sugam be?
Currently what is available in the market is a disjointed setup. There is no joint setup by all the insurance companies. Each insurance company has its own distribution mechanism, they have their own website, their own channels of distribution. So there is no one place where all of the insurance companies are available together and that transaction can be done. Of course, there are platforms like PolicyBazaar or web aggregators, but they are limited in terms of scope.
This will be a much wider platform in which all the insurance companies will be present and the customers can transact directly. It will be a trusted platform because it is being promoted by the regulator and so the customers can trust the product, they will get the correct advice and they can buy the products that they require from the platform. This is what is envisioned as part of the Bima Sugam. This brings in two aspects; one is the simplicity of buying a product, and the next is the ease of buying a product. Both these issues are being resolved or proposed to be resolved through this math.
This point is very valid. It will be very easy and very simplified for the policyholders or people who are looking for the right kind of insurance to buy from this portal. Do you also see the complaints regarding mis-selling which we are seeing which are already on the rise and every year, every quarter they are reported, especially in insurance. Will there be any control on that because of Bima Sugam?
There can be a great level of control as mis-selling happens because there are some vested interests at play. So when you approach someone for buying an insurance and whether you approach the insurance company directly or through an intermediary, there can be a vested interest at play whereby the insurance company, person who is trying to sell or the intermediary who is trying to sell may not be giving you the right kind of product that you need. They might be pushing some product which will suit their commercial interest in terms of earnings and other parameters which they have for their own assessment.
The customer need not be getting the right kind of product that they desire. But when you go to a platform like Bima Sugam, this kind of mis-selling can be controlled to a large extent because you are making the choice yourself. All the insurers are there, the products are there, the explanations of these products hopefully will be there, the assistance, the tools to assist the customer in buying the right kind of products hopefully should be there. So with all these facilities, the insurer or the customer would be in a better position to make informed choice for himself. This is the expectation behind Bima Sugam.
Talking about products that would be sold through different insurance policies, one will also get the feature to rate insurance companies and the kind of products they offer. What kind of service would this be and how would it benefit the end consumer or the policy buyer?
This remains to be seen because at the moment we do not know in what form such a rating or classification of products and those kinds of recommendations will be given out by the platform. These are all dependent on how the final things, how the algorithms or how the technology for rating will be built up in the system. As of now, there is no document available in the public domain put out by the regulator or any of the developers of Bima Sugam explaining all these concepts. One cannot really know in advance how this is going to be. But hopefully some of these rating mechanisms also should be part of the platform like Amazon gives ratings, customer ratings of products. Similarly, some kind of those facilities hopefully should be built in so that clients are able to, customers are able to sense what has been the experience of others who have bought a similar product before they make such a buying decision themselves.
Let us talk about grievance redressal. Considering that IRDAI is launching this platform, do you think complaints regarding insurance policies or the kind of product that a policyholder must have bought has any problem? Will the grievance redressal timeframe or the entire process be more simplified and robust?
Probably yes because when the IRDA or the Bima Sugam comes into force, they by themselves will not be acting as a grievance redressal agency because this is just a platform and they are not there to adjudicate any dispute. So what will happen is these disputes which are registered on the platform will go to the concerned insurance company where it will be reviewed and a decision will be conveyed back to the customer through the platform.
So the platform will be in a better position to have a hold on this complaint mechanism. They should be able to monitor it as to what are the timelines, when was the complaint registered on Bima Sugam, when it has gone to the insurance company, how long the insurance company has taken to resolve it and relate back to the customer. All these timelines can be measured by the platform and timely resolution of the customer complaint can be achieved through the Bima Sugam platform.
Let us talk about other services because people traditionally land up buying a lot of life insurance policies. Now will this portal also give you a facility to de-mat your insurance policy? Will it be compulsory to have all the insurance information in one particular portal which could be Bima Sugam? How will this work?
Yes, the Bima Sugam will also be a sort of a repository. There will be an electronic insurance account, EIA, where the customer can store his policies. So all these policies which he has purchased for different requirements can all be from any insurance company, it is not necessary that you have purchased all your policies from one insurance company.
You might be buying your health policy from one company, you might be buying your vehicle policy from some other company. So this platform will act as a repository for storing all such policies so that in the event of a claim, you would not face the problem of locating the policy and lodging a claim.
Many times what happens is insured or the customers buy policies but forget about it or misplace it and are not able to trace it out because unless you give a reference of a policy number, you cannot give a notice of a claim. So this electronic storage facility will help in retrieval of the policy and timely reporting of claims and getting the compensation from the insurance company.
I also want to understand the kind of other services, in terms of claim settlement, when we talk about buying a life insurance policy and other kinds of services because it is going to act as a repository. Will there be any fee based model also introduced on this particular platform?
It remains to be seen how the revenue model of the Bima Sugam would be, whether there will be any fees charged on the customers using the platform or whether the cost will be borne by the insurance companies or the promoters of the platform themselves. In any case, the cost will have to be borne by somebody and ultimately, the customers will have to be billed for the services. But at the moment, the promoters who are the insurance companies and the other stakeholders have put in seed capital and they are developing the platform. So once it is developed, there will be maintenance and running costs and other such service costs for which the promoters of the platform will have to find a way of recovering that cost.