INDEX

INTRODUCTION:-

Revenue growth through retention and acquisition of

customers remains a top priority for insurers, even as
increasing

regulatory

and

risk

management

requirements force the industry to explore new ways

to achieve operational excellence.
Disruptive changes in the economic, political and
most importantly in the technology environment are
collectively impelling the industry to innovate.
Digitization, as an avenue, enables insurers to equip
themselves to face the future transforming into a
digital insurer calls for an innovative approach.

HISTORY:-

Founded in 2000 and headquartered in Atlanta,

Digital Insurance was established to address the
employee benefits needs of small businesses and
mid-sized companies.
With little buying power, these companies can't
access the same attractive rates and plans from
carriers that large organizations typically receive.
Traditional brokers usually focus their efforts on more
substantial accounts.
While our original concept was to sell insurance
online to employers, before long we refined this
strategy. The new direction: to partner with other
brokers, agents and financial services companies to
manage or acquire their small group customer base.
We split commissions with our partners, freeing them
to concentrate on obtaining and servicing larger
groups. It turned out to be a win-win scenario, and
our business flourished.
2

 Digital's growth was fueled by outstanding customer

service and investments in innovative technology to
create

tremendous

efficiencies.

Both

of

these

attributes remain pillars of the company's success

formula.
Today, Digital has achieved critical mass and is the
nation's leading employee benefits-only agency. We
continue

to

develop

proprietary

products

and

enhance our technology to drive efficiencies on

behalf of our clients.
In 2011, the company organized into three divisions:
Digital Benefit Advisors; Digital Enterprise, which
serves small- and mid-sized businesses throughout
the U.S.; and Small Business Express which efficiently
manages thousands of micro-groups.
Digital Benefit Advisors evolved through a series of
acquisitions, involving a network of leading agencies
from across the country.
Clients

in

key

markets

receive

customized

consultation from seasoned professionals who devise

creative solutions to meet strategic business goals.

Each of these firms has an established reputation and

its own enduring history of community connections.
Digital's ability to embrace market opportunities such as those arising from health care reform - plus
the strength of our services, products and technology
position the company for long-term success.

CHAPTER 1DIGITALISATION OF INSURANCE POLICY

As the next step towards digitizing insurance policies,
the Insurance Regulatory and Development Authority
(Irda) has flagged off a pilot insurance repository
system for two months starting July.
An insurance repository can store all your policies
electronically under a single electronic insurance
account or e-insurance account.
Irda has registered five insurance repositoriesNSDL
Database

Management

Ltd,

Central

Insurance

Repository Ltd, SHCIL Projects Ltd, Karvy Insurance

Repository Ltd and Cams Repository Services Ltd.
As part of the pilot project, all life insurers will have
to tie up with all five repositories and change at least

1,000, or 5% of existing individual policies, whichever

is less, into the demat format.
They will also have to issue at least 1,000, or 5% of
the total individual policies, whichever is less. In
electronic form for each insurance repository subject
to a minimum of 500 policies (250 new and 250
existing) per repository.
The pilot launch has been initiated due to the weak
response to the insurance repository system. Since the
system was started in September last year, only seven
out of 24 life insurers have tied up with all the five
repositories so far.
Insurers reluctance to the system can be largely
attributed to the associated costs. One of the critical
factors affecting a smooth take-off of the system is the
failure on the part of insurers and repositories in
arriving at a price structure commensurate with the
scope of services being offered and volumes involved,
Irda said in a statement on the pilot launch.
For customers, opening an e-insurance account and
subsequently holding insurance in demat form is free
of cost, but not for insurers.
Further, insurers also have to bear the additional
expense of digitizing existing policies, for which they
would have paid the policy issuance costs already.
5

IRDA is reviewing the bottlenecks and will come out

with guidelines on insurance repository soon.
In the meantime, the pilot launch has been initiated so
that insurers are able to integrate their systems with
those of the repositories to ensure a smooth transition.
In terms of remuneration, unless already decided
between the insurer and the insurance repository
through existing agreements, the fee that the insurer
will need to pay to the repository will be capped at
Rs.60 for new policies and Rs.40 for existing policies.
Irda is expected to come out with the final guidelines
along

with the timeline soon after the pilot is

implemented. This is a huge development and a

positive step for two reasons.
One, digitization helps customers hold their FINANCIAL
assets in one place. And second, it allows for a lot of
cost saving.
Even as the costs (of e-insurance document) have been
capped at Rs.60, I believe it can come down to less
than Rs.10 after it becomes mandatory because the
repository will save on its intermediary cost, said P.
Nandagopal, managing director and chief executive
officer, India First Life Insurance Co. Ltd.
An e-insurance account can be opened either directly
with any of the insurance repositories or through an
insurer. At the time of selling a policy, the insurer will
6

have to hand out the e-insurance account form and

provide the option of choosing any of the repositories.
After the account is opened, the insurer will collect the
account details from the repository and feed them into
the policy document.
Existing customers can approach the insurer or and fill
up

the

account

opening

form

themselves.

The

insurance repository will hold the policy in electronic

form in one place.
Apart from being able to access all your policies under
a single account, the potential of the e-insurance
account is huge.
Say, a policyholder has three policies, but the nominee
is aware of only one. While making a death claim, the
insurer would log the claim and this will get updated in
the policyholder e-insurance account as well, said S.V.
Ramanan, chief executive officer, Cams Repository.
This will help us in reaching out to the authorized
representative of the policyholder and inform them of
other policies lying in the account, he added.
Insurance repositories will also be responsible for
servicing policies held in demat form with them by
providing mandatory information such as status of
policy.
Net asset value and bonus, nominee, premium due
date,

the

grievance

tracking

system,

transaction

history and claims status history, among other things.

7

 This megatrend, which has already disrupted several

sectors, is set to have a huge impact on Insurance
sector in India.
It is estimated that three in every four insurance
policies sold by 2020 would be influenced by digital
channels

during

either

the

pre-purchase

stage,

purchase or renewal stages, according to a new report

by Boston Consulting Group (BCG) and Google India.
This report, titled Digital@Insurance-20X by 2020,
asserts that not only will insurance sales from online
channels grow 20 xs from today by 2020, but overall

Internet influenced sales would be INR 300-400k crore.

Digital disruption is expected to impact insurance
significantly and, whether considered an opportunity or
a threat, insurers need to be creative to leverage this

opportunity immediately.
"While online purchases represent a small component
of Insurance activity in India today, the overall
influence of Internet on Insurance product purchase in
India is already 6x and growing rapidly.
Insurance companies in India are still lagging behind
the consumers and have not invested enough to create
digital assets to engage the mature consumers online.
Our studies have shown that 2 out of 3 users
researching for a financial product ended up changing

their mind about the brand or the product during their

pre-purchase period.
Internet allows companies to leverage the pull-based
proposition

around

Insurance

products,

because

customers are looking for the products online as

suggested by the exponential growth in Insurance
related

search

queries

on

Google.

said

Vikas

Agnihotri, Industry Director, BFSI, and Travel Google

India.
Insurers globally have commenced their digital journey,
and are reaping benefits by harnessing digital across
the value chain.
By drawing on specific initiatives undertaken by players
across the insurance value chain that have disrupted
the industry, the report provides real examples of
digital efforts that have resulted in considerable gains.
In Insurance, online term life plans and travel insurance
have already picked up substantially in the last few
years. Though better pricing is a key reason for buying
online, convenience and increased transparency are
critical factors as well.

The inefficiency of digital assets has led to emergence

of online insurance aggregators that have seen a 4x
9

growth in the value of life insurance premiums and a

7x growth in the value of health insurance.
Motor insurance sales that were relatively small in
2011-12 have also gone up four times within the last
year itself.
Insurers need to realize that just like many other
industries,

they

will

need

to

undergo

extensive

changes in the way business will be carried out in the

digital age.
The report leverages insights from wide array of BCG
India and global initiatives, including BCG's Centre for
Consumer and Customer Insights (CCCI) and captures
insights gleaned from Google commissioned research

and proprietary data.

The report not only highlights significant opportunities
for growth through digital adoption, but also proposes

a clear agenda for insurers in India to act now.

It requires insurers to be agile enough to cope with
rapid

changes

and

newer

challengers.

Initiatives

suggested to existing players include setting up digital

goal posts, rewiring for a digital mindset to build the
right

set

of

capabilities,

partnering

smart

and

accelerating their digital efforts.

Insurance sales from online channels are expected to
grow 20 times by 2020, and overall Internet influenced

10

sales would be around Rs 300-400k crore, said a report

by Boston Consulting Group (BCG) and Google India.
The report, titled Digital Insurance- 20X By 2020,
estimates that three in every four insurance policies
sold by 2020 would be influenced by digital channels
during either the pre-purchase stage, purchase or
renewal stages.
Digital disruption is expected to impact insurance
significantly and, whether considered an opportunity or
a threat, insurers need to be creative to leverage this
opportunity immediately.
The exploding popularity of smart phones and Internet
has become a core part of life for many consumers
across the globe and in India. This megatrend, which
has already disrupted several sectors, is set to have a
huge impact on Insurance sector in India.
The old ways of selling insurance are, over time
becoming less sustainable, said the report. "Insurers
have a unique opportunity to embrace and benefit
from the digital wave, which also addresses many key
issues that plague the offline world today.

We estimate that digital adoption could result in

potential savings of 15-20% of total costs in the case of
life insurance and 20-30 per cent in the case of non
11

life, thereby showing the path towards profitability for

the industry", said Alpesh Shah, a BCG Senior Partner
and Director also the author of the report.
"While online purchases represent a small component
of Insurance activity in India today, the overall
influence of Internet on Insurance product purchase in

India is already 6x and growing rapidly.

Insurance companies in India are still lagging behind
the consumers and have not invested enough to create
digital assets to engage the mature consumers online.
Our studies have shown that 2 out of 3 users
researching for a financial product ended up changing
their mind about the brand or the product during their

pre-purchase period.
Internet allows companies to leverage the pull-based
proposition

around

Insurance

products,

because

customers are looking for the products online as

suggested by the exponential growth in Insurance
related search queries on Google," said Vikas Agnihotri,
Industry Director, BFSI, Travel Google India.
Insurers globally have commenced their digital journey,
and are reaping benefits by harnessing digital across
the value chain.
Though better pricing is a key reason for buying online,
convenience and increased transparency are critical
factors as well. The inefficiency of digital assets has led
12

to emergence of online insurance aggregators that

have seen a 4x growth in the value of life insurance
premiums and a 7x growth in the value of health
insurance.
Motor insurance sales that were relatively small in
2011-12 have also gone up four times within the last
year itself. Insurers need to realize that just like many
other industries, they will need to undergo extensive
changes in the way business will be carried out in the
digital age.
The report leverages insights from wide array of BCG
India and global initiatives, including BCG's Centre for
Consumer and Customer Insights (CCCI) and captures
insights gleaned from Google commissioned research
and proprietary data.
The report not only highlights significant opportunities
for growth through digital adoption, but also proposes
a clear agenda for insurers in India to act now.

The impact of digital as a medium is no longer confined

to the affluent pockets of major cities. The explosion
insmartphone sales and broadband access has led to
the internet being adopted as a lifestyle accessory, a
source of knowledge and a viable (in many cases
preferred) mode of shopping.
13

This change can be traced back to the big boom in

online travel, a sector that was once dependent on
agents. The shift has revolutionized the entire online
buying

experience

bringing

in

convenience,

promptness and in many cases, better value.

Although this experience is yet to replicate itself across
other industries, the internet serves as a serious
alternative to the traditional purchase modes in many
other sectors - electronics, books, BFSI products,
apparels, utilities etc.
The pace of shift can be gauged from the nature of the
goods/services being offered. When the difference
between online and offline in terms of the product
offering is lower - or when there is commoditization price and convenience dictates the ultimate buying
decision. This is usually where online wins.

CHAPTER 2
MODE OF DISTRIBUTION
Insurance

companies

are

exploring

cost-effective

modes of distribution. Though the online channel does

not contribute significantly to the total sales pie at this
point, this mode of distribution is expected to gain
solid momentum in the coming years.
14

 According to Digital@Insurance-20X By 2020, a GoogleBCG report, by 2020, six per cent of all insurance sales
in India will occur online.
At this point, life insurance sales contribute about Rs
300 crore, motor insurance another Rs 250 crore,
while other insurance lines such as health and travel
make up approximately Rs 150 crore of the total
insurance pie.
The more interesting figure pertains to the influence of
digital on sales. Another simple signal that can be
relied upon is the number of search queries: Life
insurance related queries have grown by over 450 per
cent over the last five years.
It is estimated that 75 per cent of the business will be
attributed to insurance's digital footprint in 2020.This
is in line with what we are seeing in some developed
markets.
In a UK consumer research (BCG analysis, Data
monitor), 51 per cent of the consumers surveyed said
they bought their most recent policy through the
internet.
In a Customer Sentiment Survey by BCG in eight
countries (the US, Japan, Germany, France, the UK,
Italy, Spain and Australia), we see that 70 per cent of
insurance owners either prefer remote, mostly digital,
or a hybrid model of interaction.
15

 I will go as far as to say that social media engagement

and quality content can subsidies your marketing
effort and can become the lead nurturing outlet that a
'push' industry like insurance needs.
To help your customers shift from the agent-assisted
model to your most profitable channel, you need to be
present where the customer is and handhold her when
she needs you.
This means companies have to move beyond a focus on
pure sales to developing an ecosystem, which starts
from capturing an unaware prospect's attention,
convincing her to buy and ends with recommending
others. This will not happen overnight.

It involves a gradual coming together of the traditional

and the electronic across the value chain. Ultimately,
the organization that is able to offer the best
experience to the customer is likely to survive and
win.
About three of every four insurance policies sold by
2020 would be influenced by digital channels during
pre-purchase, purchase or renewal stages, according
to a report by Boston Consulting Group (BCG) and
Google India.
16

 The report, Digital@Insurance-20X By 2020, said not

only would insurance sales from online channels grow
20 times from today by 2020, but overall internetinfluenced sales would touch Rs 3,00,000-4,00,000
crore.
The study said traditional ways of selling insurance
were becoming less sustainable. Traditional business
models are being challenged by the emergence of
trends such as lesser relevance of physical footprint,
mobile

internet,

analytics,

social

platforms

and

disruptive players.
As insurers seek new avenues to grow profitably, they
have a unique opportunity to embrace and benefit
from the digital wave, which also addresses many key
issues that plague the offline world today.

We estimate that digital adoption could result in

potential savings of 15-20 per cent of total costs in the
case of life insurance and 20-30 per cent in the case of
non-life, thereby showing the path towards profitability
for the industry, said Alpesh Shah, a BCG senior
partner and director, and also the author of the report.
Vikas Agnihotri, industry director, BFSI, Travel Google
India, said while online purchases represent a small
component of insurance activity in India today, the
17

overall influence of internet on insurance product

purchase in India was already six times and growing
rapidly.
Insurance companies in India are still lagging behind
the consumers and have not invested enough to
create digital assets to engage the mature consumers
online.
Our studies have shown that two out of three users
researching for a financial product ended up changing
their mind about the brand or the product during their
pre-purchase period, he said.
The report said online term life plans and travel
insurance had already picked up substantially in the
last few years. Though better pricing is a key reason
for

buying

online,

convenience

and

increased

transparency are critical factors as well.

The inefficiency of digital assets has led to emergence
of online insurance aggregators that have seen a fourtime growth in the value of life insurance premiums
and a seven-time growth in the value of health
insurance.
According to the report, motor insurance sales that
were relatively small in 2011-12 have also gone up
four times within the last year itself.
However, it said insurers need to realize that just like
many other industries, they would need to undergo
18

extensive changes in the way business would be

carried out in the digital age.
A recently published report by Google India and Boston
Consultancy

Group

(BCG)

forecasts that

online

insurance industry in India will become 20 times its

current value and will cross Rs 20,000 crore by 2020.
The report titled Digital@Insurance-20X By2020 was
released yesterday in Mumbai. At present, online
insurance market in India is pegged at Rs 700 crore,
out of which Life Insurance related transactions
account for Rs 300 crore.
Whereas non-life insurance related plans such as Motor
Insurance accounts for Rs 250 crore; Health and Travel
Insurance makes up Rs 150 crore.
In the coming 6 years, online

transactions

and

activation of both life and non-life insurance will

become 20 times its current value.
Such massive explosion in this industry will be driven
by adoption of online services by more and more
Indians and the ease of use and plan selection offered
by websites catering to this segment.
Right now, 200 million Indians are online which will
swell to 360 million by 2016 and 500 million+ by 2020
as per the estimates of this report.
Alpesh Shah, BCG senior partner and the author of the
report said, The digital adoption could result in
potential savings of 15-20 per cent of total costs in the
19

case of life insurance and 20-30 per cent in the case of

non-life, thereby showing the path towards profitability
for the industry.
As per the report, online life insurance sector
will grow at a compound rate of 3-5% per annum till
2020, which will make it Rs 3500-Rs 6000 crore
industry.
Whereas online non-life insurance market will grow at a
rate of 15-20% per annum till 2020, making it Rs
11,500 crore Rs 15,000 crore industry.

CHAPTER 3DIGITAL INSURANCE INDUSTRY

Overall, digital insurance industry will touch Rs 15,000
crore Rs 20,000 crore volumes, growing 20 times of
its current market value.
This finding of the report will give a huge boost to the
overall ecommerce and online marketing industry in
India, as more and more players are entering the
segment to lure ever increasing Indians to the charms
of the web.
With 900 million mobile users, 200 million Internet
users and 95 million Face book users, Indian is right
20

now on a threshold of massive explosion in Internet

based transactions and shopping.
Vikas Agnihotri, Industry Director, BFSI, Travel Google
India said, Today, the overall influence of internet on
insurance product purchase in India is already 6x and
growing rapidly.
Insurance companies in India are still lagging behind
the consumers and have not invested enough to create
digital assets to engage the mature consumers online.
The biggest challenge for the industry would be to
think big.
Online renewals of insurance policies (offline and online
both) is another segment which will encounter massive
boom in coming years.
As per the report, 10-15% of all renewals of existing
insurance policies are anyways coming in via online
route; which makes digital renewals market to the tune
of Rs 15,000 crore Rs 20,000 crore / year.
By 2020, online renewal industry will be more evolved
with better penetration which will make it grow 30-35%
of the current value, making it Rs 1,75,000 crore Rs
3,00,000 crore industry.

21

CHAPTER 4GROWTH OF DIGITAL INSURANCE

As many as three out of every four insurance policies
will be sold online by 2020, says a Google study. "It is
estimated that three in every four insurance policies
sold by 2020 would be influenced by digital channels
during either the pre-purchase stage, purchase or
renewal stages," according to the report prepared by
Google, in collaboration with Boston Consulting Group
(BCG).
The report 'Digital@Insurance-20X By 2020' asserts
that not only will insurance sales from online channels
grow 20-fold from today by 2020, but overall internet
influenced sales would be Rs 3,00,000-4,00,000 crore.
22

 The exploding popularity of smart phones and internet

has become a core part of life for many consumers
across the globe and in India," the report said.
The influence of digital is already 'big' and is getting
'bigger', exponentially in terms of user growth and time
taken. The connected online population of over two
billion users forms a brand new market that cuts across
borders, it added.
"As insurers seek new avenues to grow profitably, they
have a unique opportunity to embrace and benefit from
the digital wave, which also addresses many key issues
that plague the offline world today," it said.
"The digital adoption could result in potential savings of
15-20% of total costs in the case of life insurance and
20-30% in the case of non-life, thereby showing the
path towards profitability for the industry", said Alpesh
Shah.
A

BCG

senior

report. "While

partner

online

and

purchases

the

author

represent

of
a

the
small

component of insurance activity in India today, the

overall influence of internet on insurance product
purchase in India is already 6x and growing rapidly,"

23

said,

Vikas

Agnihotri,

industry

director,

BFSI and

Travel, Google India.

Max Life Insurance, one of the leading life insurers in
India, has released an extensive research that aimed to
gauge knowledge, attitude and behavior of active
internet

users

in

India

on

'protection

and

life

insurance'.
The research imparts insights on awareness and
attitude

of

Indian

digital

natives

towards

family

protection. Max Life Insurance conducted this research

in association with Nielsen India, India's premier market
research institution.
The key findings from a sample of 1009 respondents
have indicated that Life Insurance is one of the most
searched

financial

products

online,

but

does

not

translate into proportionate purchases.

North India displays highest engagement on the online
channel and is well aware of benefits received by
purchasing life insurance online.
However, despite this displayed sensitivity towards life
insurance, it does not fare well in the action quotient. It
showed that about 43% of North Indians display high
confidence on family protection.
24

 However, the percentage cannot be considered high

given that internet users are considered to have higher
awareness and education levels.
Reality shows that tendency of postponement is high
with only 51% of underinsured people intending to buy
Life Insurance after 6 months.
Casual attitude pertaining to protection is also reflected
in North Indian search of financial products. Life
Insurance ranks third amongst the most searched
financial product by North Indians. The trend is opposite
to that witnessed in India.
A majority of North Indians believe that purchasing Life
Insurance online enables consumers with benefits like
quick turnaround and price competitiveness.
Interestingly, 90% of life insurance owners from North
searched the category over internet prior to last
purchase. Majority of them searched either through
online

retailer

or

the

websites

of

life

insurance

companies.
76% people did embark on the online purchase journey
however, three fourths drop off before the purchase
was made. This reflects majority of North Indians find
the purchase process tedious or difficult.
25

 Lack of personal interaction and absence of seller are

the major concerns shown by North Indians while
buying insurance online.
Also, ironically, a majority of Internet savvy Indians
came

to

know

about

online

life

insurance

from

traditional sources like agent & peer group. Internet,

thus, has marginal contribution in creating awareness
about Online Life Insurance.
Contrary to common belief on higher awareness about
online insurance, Agent Advisors are the most preferred
channel of purchase for immediate planned purchases.
75% of North Indians prefer buying life insurance from
Agents. They have the highest engagement on online
channel. Moreover an interesting finding is that older
population

is

comparatively

more

comfortable

transacting online than younger people.

In spite of the fact that they are highly active for

paying premiums, checking NAV/Policy values and
accessing premium payment receipts, only 16% have
purchased policy online.

Commenting on the research findings, Anisha Motwani,

director and head - marketing, direct sales and ecommerce, Max Life Insurance said, "The research
26

findings are a crucial insight into the customer's

behavioral

psychology

towards

this

evolving

distribution channels and how people actually respond

to it.
These observations will, going ahead be the key in
facilitating product development."The online insurance
market in India is already in excess of Rs.700 crore.
While life insurance sales contribute around Rs.300
crore, motor insurance around Rs.250 crore, other
insurance lines such as health and travel make up
around Rs.150 crore, according to a new Boston
Consulting Group (BCG) report released on Tuesday.
It is estimated that by 2020, three in every four
insurance policies would be influenced by digital
channels during the pre-purchase, purchase or renewal
stages, the BCG report added.
According to the report titled Insurance @ digital20X
BY 2020, though better pricing is a key reason for
buying online, convenience and increased transparency
are critical factors as well.
BCG predicts that the life insurance annualized new
business premium is poised to grow by 2-2.5 times by

27

2020 to Rs.1.25-1.5 trillion, with renewals expected to

grow to Rs.5.5-7 trillion.
The nonlife insurance industry will grow by around 33.5 times from its current size to Rs.2-2.3 trillion. Online
sales are bound to grow even faster than this.

CHAPTER 5E-INSURANCE POLICIES

The world is moving towards using less paper and to

electronic records, especially financial records.
Shortly you too can get and maintain your insurance
policies in electronic form.

28

 IRDA has issued

repositories

and

guidelines relating
electronic

issuance

to insurance
of

insurance

policies.
Maintain, store and retrieve your policies and the
information in them easily modify or revise your
insurance policies with speed and accuracy.
It will help increase efficiency and transparency. It will
reduce the cost of issuing and maintaining insurance
policies.

CHAPTER6IRDA GUIDELINES FOR ELECTRONIC RECORD

TIRED

OF

MAINTAINING

YOUR INSURANCE

POLICIES AND

FILE

OF

PREMIUM

RECEIPTS?
Thanks to the recent guidelines by the Insurance
Regulatory and Development Authority (Irda), you can
soon have all your policies stored safely in an electronic
account.
29

Stocks, mutual funds and bonds are already allowed to

be held in demat accounts. Irda has issued guidelines
to form an insurance repository which will store the

policies in electronic format.

Like stocks demat accounts, each insured person will
have an insurance demat account where all his/her
insurance policies- both life and general policies from
all insurers-will be stored.
Dematerialization of insurance policies is expected to
make the transaction process fast, lower the costs and
eliminate frauds.

In case of change in address, you will have to just

inform the repository instead of having to inform

several insurers.
It will also save you from having to go through the
"Know Your Customer" procedure each time you buy a
new policy.
Insurance is also expected to make switching insurers
easy as companies will have fast and easy access to
applicant's claims history and other details.
Health insurance becomes portable from July 1. Unlike
demat accounts for stocks, insurance demat accounts
will be free.

30

 "No cost of e-insurance shall be collected from einsurance account holders, either by an insurance
repository or an insurer," Irda has said.

Chapter7How insurers should respond

Adapting to a new digital landscape presents many
difficulties for insurers as they face challenges in
introducing

new

channels

to

market

while

simultaneously remodeling traditional ones.

While no single solution can seamlessly integrate digital
into a business, there are elements intrinsic to all
effective digital strategies.
Insurers need a vision that focuses on the basics:
1. Framing the investment argument for digital
2. Building the analytics infrastructure
31

3. Embedding

culture

of

innovation

into

the

organization.
4. A robust digital strategy begins with a plan and a
sound understanding of the practical realities of
implementation.
5. Each of the elements corporate strategies,
customer expectations, target operating models
and enabling frameworks will shape each other as
digital capabilities develop.

CASE STUDY

TH

E- ORIENTAL INSURANCE COMPANY

LIMITED

Re

Office:

Oriental

House,P.B.No.7037,A-

25/27,Asaf

Ali

Road, New Delhi-110 002

ELECTRONIC EQUIPMENT INSURANCE (EEI)

32

 The term electronic equipment is used for all systems

which generally require very low voltage and power.
These equipments are generally quiet in their operation.
EEI Policy protects the Owner, Lessor or Hirer (where
responsible

either

legally

or

through

leasing

agreement) of electronic equipment.

EEI Policy is Suitable for all electronic equipments
(some examples): Computer and allied peripherals
Auxiliary

equipments

like

UPS,

Voltage

Stabilizer,

Medical, Biomedical, Equipments e.g. Cath Lab, Xray

Machine, Ultrasound machines, MRI, CAT scan Machines,
Audio/Visual

equipments,

Electronic

control

panels,

Telecommunication and navigational equipments.

Electronic equipment for research and material testing.
The term equipment shall include the entire computer
system consisting of CPU, Keyboards, Monitors, Printers,
Stabilizers, and UPS etc.
The value of Software can be covered under this policy.
It

can

cover

moveable

and

equipments also.

33

portable

electronic

SCOPE OF COVER: This Section covers the accidental damage to the

insured equipment against All Risks, namely

Fire,

Lightning, Explosion/Implosion, Aircraft Damage, Riot,

Strike, Malicious and Terrorism Damage, Storm, Cyclone,
Typhoon,

Tempest,

Hurricane,

Tornado,

Flood

and

Inundation, Impact Damage, Subsidence Land slide,

Rock slide, Bursting and/or overflowing of Water Tanks,
Apparatus

and

Pipes,

Missile

Testing

operations,

Leakage from Automatic Sprinkler Installations, Bush

Fire

(Fire

&

Allied

Perils),Electrical
34

&

Mechanical

Breakdowns, Burglary & Theft, Negligence, Lack of Skill,

Carelessness.
In short, the cover provided is for damage caused by
unforeseen and sudden physical loss or damage from
any cause (other than those specifically excludedexplained

in

subsequent

paragraphs) in

manner

necessitating repair or replacement.

This Section covers Loss/Damage to external Data
Media i.e. Tapes, Discs, magnetic drives etc caused by
any peril as mentioned earlier in Section-I.

IMPORTANT WARRANTY: It

is

imperative

that

Preventive

Maintenance

Agreement be in force during the currency of the policy

for

all

electronic

equipment

with

a sum

insured

exceeding Rs.1.0 Lakh.

No variation in the terms of the Preventive Maintenance
Agreement shall be made, during the policy period,
without the written consent of the Company.
35

 The word Maintenance shall mean the following

Safety checks, Preventive maintenance Rectification of
loss or damage or faults arising from normal operation
as well as from ageing.

The Warranty relating to Maintenance Agreement

under the policy can be waived by charging additional
premium.

Wherever,

the

competent

InHouse

maintenance facility is available, the warranty relating

to Maintenance Agreement with the manufacturers of
the equipments can be deleted for all electronic
equipments except Medical equipment.

SIGNIFICANT GENERAL EXCLUSIONS:Some General Exclusions are loss/damage caused by:

1. Inherent Vice
2. Manufacturer's Responsibility
3. Willful Act
4. Cessation of work whether total or partial
5. War perils
36

6. Nuclear Perils

SIGNIFICANT EXCLUSIONS TO SECTION 1

(EQUIPMENTS):

Deductible stated in the Schedule Faults/defect existing

at the commencement of the present insurance and
within the knowledge of the Insured.

Wear and tear losses Cost incurred in connection with

the elimination of functional failure Maintenance Costs
Aesthetic defects Consequential loss of any kind.
37

Loss / damage falling under the terms of the

Maintenance agreement. Loss / damage where the
manufacturer or supplier is responsible.

Loss / damage where the owner is responsible (rented

equipment)

SIGNIFICANT EXCLUSIONS TO SECTION 2

(EXTERNAL DATA MEDIA):Deductible stated in the Schedule any costs arising from
false programming, punching, labeling or inserting,
inadvertent canceling of information or discarding of
data media, and from loss of information caused by
magnetic fields consequential loss of any kind or
description whatsoever.
38

SIGNIFICANT EXCLUSIONS TO SECTION 3

INCREASED COST OF WORKING- (ICOW)

Costs incurred for use of substitute equipment during

the Time Excess Costs for replacement of data media,
data and regeneration of data (can be covered under
Section 2 External Data Media) Costs arising out of
circumstances, which are not connected with the insured
material damage.

For example, additional costs arising out of - bodily

injuries, orders or measures imposed by any public
authority,

expansion

and

improvements

of

the

equipments, Lack of funds causing delay in repairs or

replacement any other consequential loss such as loss of
market or interest.

India First Life Insurance, one of the youngest and

fastest growing private life insurance companies in India,
invited pitches from media and digital agencies.

The media agency selected will help India First reach

out to its stakeholders consistently in an innovative and
efficient manner using mass media and OOH; while the

39

digital will help the company establish its digital

business channel.

This

will

include

Search

Engine marketing (SEM),

Search Engine Optimization (SEO) and Social Media

Management (SMM). Being able to think out of the box
and

find

engaging

requirements
parameters,

will

solutions

form

the

says

Ms

to

crux

meet
of

the

Tamanna

business
selection
Khanna,

Head marketing, and India First Life Insurance.

The empanelment will be for a period of three years,

renewable on a yearly basis on successful fulfillment of
KPIs. India First Life Insurance, since its inception in the
year 2010, as on date has garnered over INR 6,500
crores of AUM within five years of its operations and
covered over 2.7 million lives pan India.

CONCLUSION
Insurance organizations will have to transition to digital
enterprises to remain competitive and profitable in this
age of constant disruption.

40

 While the ultimate goal of insurance providing

financial stability and protection for customers at
various stages of their lives will always remain, how
insurers achieve this goal will evolve constantly.
Repositioning for this new normal must be looked upon
as an opportunity and not as a threat, since digitizing
the

enterprise

can

help

drive

efficiencies

and

innovation, use data more effectively and create newer

and better business models.
Insurers have the opportunity to extend their portfolio
into newer adjacent eco-systems tying up with auto
companies to use vehicle telemetric to create new
insurance products based on shared data is just one
example.

Technology is a key enabler in the transition to a digital

enterprise, and insurers must invest in a robust business
and technology architecture with the relevant tools to
create an agile and flexible organization.

Insurers saddled with large legacy systems must

consider eliminating, consolidating, migrating and in
some

cases

continuously

orchestrating
investing

in

business models.
41

that

complexity

generating

while

innovative

Insurers can use the digitization opportunity to deliver

greater value to their customers and gain competitive
advantage, engaging more intensely with existing
customers

and

attracting

newer

customers

with

innovative products, improving both profitability and

growth.

42

BIBLIOGRAPHY:-

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