Insurance on the go, when will it materialize in Nepal?


Kathmandu: While agents are protesting against the new provision of institutional agents in Nepal, the facility to buy insurance plans without any hassle has started in Asian countries through mobile apps.

Payment service providers (PSPs) are providing insurance services to the general public through mobile apps or web portals without any hassle. Even in India, private sector insurance companies are selling non-life insurance plans online and through mobile apps. When the business of state-owned insurance company LIC India witnessed a decline during the Covid19 epidemic in last FY, the private sector’s insurers were able to expand their business by making full use of information technology.

In the Southeast Asian country of Malaysia, the public can buy the insurance plan of their choice 24 hours a day through an app called VSure. Recently, the company tech company VSure has provided the facility that the insured can insure only for a number of days or monthly period too. That is, they do not have to be insured for at least one year as in Nepal. The insured can choose the insurance period for as long as he/she needs insurance. This reduces the unnecessary burden of premium on the insured.

Although some life insurance companies in Nepal provide the facility to fill up insurance proposal forms on their websites, the process of issuing insurance policies is not completed online. The provision by the regulatory body that postage stamps must be affixed to the copy of insurance policies is another hurdle to issue insurance policies online. Insurance Board, the regulatory authority, has set a maximum limit of Rs. 300,000 SA for the life insurance policies sold online. However, no life insurance company has issued an insurance policy directly to the insured’s email without the involvement of an agent to date.

Professional Life Insurance Agents protested in an organized way after the Insurance Board issued the Institutional Agents Directive a few months ago with special provisions on institutional agents with the objective of making it easier to sell life and non-life insurance plans. After strong protests, the IB has not given priority to the issuance of the organizational agency’s license as per the directive for the time being.

The directive issued by the IB provides that even digital PSPs can sell insurance plans obtaining the license of an institutional agent. The IB has also paved the way for PSPs like Esewa, Khalti, IME Pay, Prabhu Pay, Moru, etc to obtain institutional agency licenses. Such services are based on information technology systems certified by regulatory bodies and are less likely to deceive the insured by providing false or misleading information.

However, the issue has come to a pending status after the agents, who are working as agents in person, protested the new provision for institutional agency license claiming that their livelihood would be taken away.

The offices of life insurance companies will remain closed during the festive season when the general public has free time. If the facilities of purchasing insurance plans through digital medium were available, the insurer would not have to remain at the office till late at night and wait for the insured. After the involvement of the PSPs or Mobile apps-based services, the job of the insurers would be limited to aware the public about their insurance plans and facilities through social media and mass media.

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