Insurers Want 100% Stake in InsurTech Startups
TECH EDGE Companies discover potential of new technologies to disrupt the sector and seek control
Fintech, long a buzzword in banking, has reached the shores of insurance companies who are lobbying the regulator to have a bigger say in stake holding. Insurance companies want to own and nurture startups with 100% stake from the current 10% cap the regulator has put on holding.
“We want to buy all 100% in InsurTech companies, which align with our business,” said Prashant Tripathy, CEO, Max Life Insurance.
“We, as an industry, have made a presentation to Irdai to allow us to own 100% in these companies.” Many insurancecompanies still rely on legacy software.
Lately, though, they have dedicated teams to monitor new technologies to be able to understand their true potential for disruption and are keen to invest in technology companies that they perceive can disrupt the insurance industry.
Companies in the insurance innovation space are focused on building digital platforms, which are aggregators and robo advisors using machine learning and usage-based selling.
Insurers are using technology that aids fraud detection at the point of underwriting and also for assessing risk — for example, the use of wearables in the context of ‘diagnostics’ for better underwriting. There are a dozen insuranceaggregators that help customers compare policy features and assist in buying. Others use sensors that stick to the skin and are used for fitness monitoring, glucose level monitoring to track health.
In life insurance, companies are using either in-house or outsourced big data or artificial intelligence for underwriting.
Regulator Irdai has said in the past that when it comes to product design and pricing, details of cognizance of usage of wearable/portable devices should be part of the product filing and such products should first be tested in the sandbox environment or on a pilot basis.
It is working on the aspect of creating a regulatory sandbox to encourage InsurTech in the Indian landscape.
Source : Economic Times