Insurers have urged the Insurance Regulatory and Development Authority of India (IRDIA) to allow them to acquire 100% stake in insurtech start-ups in India, reported The Economic Times.
Existing rules prevent insurers from acquiring more than 10% stake in insurtech startups due to which they are unable to access the propriety software developed by these companies.
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Many insurers are still using legacy software at the back end and are unable to compete with tech-savvy firms as they leverage technology in various areas of their operation from fraud detection to cross-selling of insurance plans.
Max Life Insurance CEO Prashant Tripathy told the publication: “We want to buy all 100% in InsurTech companies, which align with our business.
“We, as an industry, have made a presentation to IRDAI to allow us to own 100% in these companies.”
Earlier, IRDAI said that it is working on creating a regulatory sandbox to support insurtech in the Indian landscape.
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By GlobalDataThe regulator also commented that use of wearable/portable devices for the purpose of underwriting a policy must be tested in the sandbox environment or on a pilot basis.
Apart from building digital platforms, the insurance companies are using technology to prevent fraud during underwriting and for assessing risk.
