E-Procurement Practices in Life Insurance India
Author(s):
CT Srinivasan, Chok
Keywords:
E- Tendering, E-Procurement, E- Sourcing, E-Informing, E- Negotiations, E-Invoicing, E- Informing, E-Procurement adoption, Procurement effectiveness, Life insurance India, category experts, financial services, PLS-SEM (Partial least square structural equation modeling)
Abstract
The IRDA (Insurance Regulatory and Development Authority) opened the market in August 2000 following an invitation to register. Foreign companies were allowed to own up to 26%. The supervisory authority IRDA can issue regulations under section 114A of the Insurance Act 1938. Since 2000 it has issued various regulations ranging from the registration of companies to the pursuit of insurance activities and the protection of insurance policy holders' benefits. Today, there are 24 life insurance companies serve, out of which 23 are private life insurers and one public sector life insurance corporation of India The insurance sector is enormous and growing rapidly by 15-20%. Together with banking services, insurance services will increase by about 7% of the country's GDP. A well-developed and advanced insurance sector is a blessing for economic development, as it provides long-term funds for infrastructure development while strengthening the country's risk-taking capacity. The Procurement function operated as a support function instead of a strategic function as core processes, and policy issuance did not involve procurement activities (GEP Knowledge Bank). Insurers implemented traditional procurement processes without exploring the appropriate framework specific to the Insurance industry along with leveraging technology since procurement function was not a focus and priority; Research problems arise because many businesses still rely on traditional procurement, and literature has provided limited results on the specific framework and procurement effectiveness specific to life insurance leveraging technology. However, there are numerous challenges in developing an effective sourcing and acquisition program for insurance companies. Suppliers are usually deeply involved in the core processes of insurance companies. Switching suppliers can be difficult while maintaining customer service and ensuring an effortless compensation experience for policyholders. It is also essential for profitability growth and sustainability of the life insurance business for new business collection and renewal collections. The degree of maturity of procurement in the insurance industry has traditionally lagged far behind other sectors
Article Details
Unique Paper ID: 157668

Publication Volume & Issue: Volume 9, Issue 7

Page(s): 825 - 870
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