Malini Raman, Pratima Rani, TCS Financial Solutions
Estimates point to the fact that billions of dollars go unclaimed every year during natural calamities such as floods, earthquakes. And, this is despite the enormous impact on life and property. , insurance policies in force to protect policyholders from such events. In fact, while life insurance policies are popular in most countries, family members of the deceased are often not even aware of a policy’s existence. In many instances, disastrous events cause the loss or mutilation of insurance policy documents that are typically needed to request or process insurance claims. Policyholders or their beneficiaries are then forced to approach multiple stakeholders, including the insurer and the insurance agent in order to trace an existing policy and initiate a claim. Digitization of policies and easy access to policies is therefore of vital importance for policyholders or their beneficiaries.
The insurance industry on the other hand is also facing a key challenge of dealing with large volumes of documentation at each step of the insurance value chain that comprises issuance of policies, underwriting, claims execution, payment management, policy servicing, among others. In addition, there are added overheads to maintain this historical information for future reference and audits. Paper-based processing is an expensive burden for issuers, especially in the backdrop of new insurance products being launched continuously the world over.
These challenges drive attention towards the need for setting up ‘Insurance Repositories’. These may be national or regional repositories that can hold insurance policies across multiple Insurers in electronic form, and provide policy administration and servicing to policyholders at large. Policyholders can nominate an authorized representative who has access to the insurance account in circumstances where the policyholder is no more or incapable of accessing it.
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