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.
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.
The 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.