Insurers should use data analytics to design products

Hyderabad: Insurance companies should make use of data analytics to design products and pricing, the Insurance Regulatory and Development Authority of India (Irda) Chairman T S Vijayan said on Friday.

“Insurance is happening on probability. If there is a central organisation, which collects data from all the insurance companies, a very good tariff can be generated, premium rates can be generated. This is what IIB (Insurance Information Bureau of India) is doing today,” Vijayan said.

The Irda Chairman was addressing the annual conclave of Insurance Information and Ratemaking Forum of Asia, 2016. R Raghavan, Chief Executive Officer of IIB, said as the total insured population in India was a very small base, the role of technology to push the product through multiple channels including Internet, Mobile will help increase the coverage.

This increased coverage will reduce the cost of insurance and make it more affordable to the common man. Since insurance is a ‘push product’ and India is not a risk sensitive country, the insurance companies and the Government, both the Centre and State, need to collaborate and incentivise the need for taking an insurance cover, Raghavan added.