Last week, I had an interesting discussion with an Insurance industry colleague who was a bit perturbed and agitated at the fact that a survey reported that about 80% of the Insurance buyers in India still preferred physical copy of the insurance policy document over digital policy document. Here is the news article, which triggered this conversation:
My industry colleague almost complained about this consumer behaviour and wondered what else do Insurers need to do to keep their customers happy.
But there are multiple sides to this story. And here are a few interesting observations:
- This news article actually reported a Survey conducted by Bombay Masters Printers Association. As per the article, IRDA mandates Insurers to send both digital as well as physical copy of the policy document. However during the pandemic, IRDA waived the mandate to send the physical copy of the policy document to the Insurance buyers. I don’t want to discredit the survey, but certainly a stakeholder in this ecosystem is losing out thanks to IRDA’s waiver.
- More interesting point in the article is that Claims / Maturity Processing teams of most of the Insurance companies demand physical policy document while processing a claim or maturity benefit. Now, if this is indeed true, then Insurance Companies should only blame themselves for consumers preferring physical policy document. And may be there is case to examine as to why insurance companies need to get the physical document at the time of processing a claim or maturity benefit.
- Lastly, there may be a genuine need to have the physical copy of the insurance policy by Insurance buyers. Mostly Insurance Claims particularly in Life and Health Insurance are registered and managed by Insured’s relatives or nominee on the policy. A digital copy typically lies in the email account or the customer portal of the Insurance Owner, to which the relatives or nominee may not have easy access while processing the claims. Physical copy on the other hand most likely is filed & kept by the owner along with other financial documents, of which the family members or the nominee may have the knoweldge and hence easier access.
There may be a merit in the preference of the Insurance policy owner to hold the physical policy document. Insurance companies need to analyse their internal processes so that their own Claims processing teams do not insist on submitting the physical policy document. And also expore the possibility of obtaining communication details of the nominee or a close relative who can be provided the copy of the digital policy document as per the preference of the Insurance buyer.