India’s insurance regulator is looking to privatise the Insurance Information Bureau to enable better use of the industry data for all stakeholders.
A committee headed by member (life) is looking into the corporatisation of IIB, Debasish Panda, chairman of Insurance Regulatory and Development Authority of India, or IRDAI, told BQ Prime in an interview. “We will discuss this further once the committee presents its report.”
IIB is a repository and analytics body established to empower stakeholders and provide accurate, timely, reliable insurance data and analysis. Set up in 2009 and promoted by the regulator, it’s an independent non-profit earning society registered in 2012 under the Andhra Pradesh Societies Registration Act 2001.
The bureau operates through its insurance domain verticals of life, health, motor, property, fire, engineering with dedicated support from IT and analytics verticals. It services range from providing background data to IRDAI for setting third-party motor premium rates, tabulating age-wise mortality rates for use by life insurers to maintaining a registry of hospitals for insurers’ use, among others.
The Business Standard newspaper and Zee Business reported that there is a plan for a scoring mechanism for the insurance, similar to Cibil that helps lenders gauge if a potential borrower is creditworthy.
Panda declined to comment on the issue.
According to an industry veteran who advises the regulator, insurers have a lot of data and IIB is the custodian of this data, which is so far being underutilised.
So a Cibil-like database would help reduce frauds, dissuade false claims, the person said on the condition of anonymity since he is not authorised to speak to the media. It will also allow the insurance buyer to get lower premiums in form of no-claim bonuses and other value-added offerings such as wellness benefits on health policies, the person said.
Lokanath Kar, founder ElpeeCo and former chief legal and principal compliance officer with ICICI Lombard General Insurance Co., told BQ Prime that IIB has been collecting a lot of data since its inception in 2012. “This data could find meaningful applications in the insurance industry as well as be useful to people outside the insurance sector.”
Currently, there is limited usage of data since the IIB has been constituted in the form of a society, he said. The IRDAI, therefore, thinks that a corporate structure and a professional board governing this set-up could help in developing a better risk system, helping in the growth of the risk management industries including insurance.
Kar said the IRDAI chairman is also discussing if insurance behaviour and insurance fraud should be part of the credit rating as the industry has demanded. “However, it is not clear whether a separate score for insurance would be brought in or it would be linked to the already existing score of the credit rating agencies.”