But the good news is that the business is slowly growing, he added.
"While average cost for a life insurer for maintaining a policy in a repository is about Rs 40 per year, it is Rs 10 per year for a non-life insurer in respect of health and motor insurance policies," Ramanan said.
Totally there are four insurance repositories in the country viz NSDL, CDSL, CAMS and Karvy.
Simply put, insurance repositories keep the policies in digital or demat form like company shares.
As per the regulatory norms, the digital record keeper should be a third party.
Queried about the insurance repositories charging about Rs 40 per life insurance policy per year, he said if the volumes pick up, then the overall cost may come down.
However, adoption by life and non-life insurers of having their policies in digital platform is not great as they feel it has dual costs -- maintaining policies in paper as well as digital formats.
Ramanan said pure record keeping may not get the insurance repositories money and hence, CAMS provides other services like tele-marketing, agency administration, issue of policies and their administration and claims processing for an additional fee.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)