Indian private insurer Bajaj Allianz Life Insurance has implemented the Bima-ASBA facility, an initiative by the Insurance Regulatory and Development Authority of India (IRDAI) to streamline the insurance premium payment process.
With this move, Bajaj Allianz becomes the first insurance company to adopt the facility.
Go deeper with GlobalData
The Bima-ASBA system allows policyholders to utilise the Unified Payments Interface’s One-Time Mandate (OTM) to authorise the blocking of funds up to Rs200,000 ($2,306) in their bank account.
This amount will only be debited after the underwriting process is complete and the insurance proposal is accepted.
If the application is not processed within 14 days or if the proposal is declined, the blocked amount is automatically released back to the customer’s account.
According to Bajaj Allianz, this ensures that the policy buyer’s funds continue to earn interest until the policy issuance is confirmed.
The company has introduced this process in collaboration with its payment partners.
Bajaj Allianz Life MD and CEO Tarun Chugh said: “The life insurance industry has been working to be more agile, simplify processes and build customer trust, and Bima-ASBA will further strengthen these efforts by adding a layer of security, confidence and flexibility for policyholders.
“By allowing customers to block their premium amount instead of paying upfront, it addresses concerns about refunds if a policy isn’t issued. At Bajaj Allianz Life, our Customer First promise inspires us to innovate continuously, and Bima-ASBA aligns with this focus.”
In August 2024, Bajaj Allianz Life, a joint venture between Bajaj Finserv and Allianz SE, formed a bancassurance partnership with HSBC India.
