Innovation in regulatory framework, promotion of ease of doing business while enhancing protection of policyholders interests and measures taken to expand the reach of insurance penetration make 2023 a year to remember in the insurance industry.

The Insurance Regulatory and Development Authority of India (IRDAI) brought multiple reforms, focussing on three prominent themes – strengthening the ecosystem, improving accessibility & reach, and safeguarding policyholders’ interest.

The regulator has envisaged three major initiatives - Bima Sugam, a one-stop digital platform, Bima Vistar, an all - in one affordable insurance cover and Bima Vahak, a women-led-field distribution force. Popularly labelled as the `Insurance Trinity’ , these initiatives are expected to be game-changes for the insurance industry in the country bridging the existing gaps in the product design, pricing and distribution. 

In terms of insurance penetration, the Lead Insurer Scheme was a major initiative to achieve expansion of the reach of insurance products. A new draft product design norms including a proposal for higher surrender value for non-linked products and lower charges for insurers was also released by IRDAI.

“The year 2023 saw some market-moving developments for the industry including the government’s decision to levy tax on income arising from insurance policies with an aggregated premium worth ₹5 lakh every year, starting April 2023,’’ Sumit Rai, MD and CEO, Edelweiss Tokio Life Insurance

”There was a sustained emphasis on digitalisation to reimagine customer and distributor management processes,’‘ Rai said. 

According to Vighnesh Shahane, MD and CEO of Ageas Federal Life Insurance, 2023 reflects on a “transformative’” year.  “This pivotal year has been characterised by remarkable achievements, dynamic shifts, and an unwavering commitment to innovation, customer-centricity, and regulatory compliance. A standout force driving this evolution is the insurTech sector, which saw significant expansion in 2023,’’ he said.

Notably, several InsureTech players have played a leading role in reshaping traditional insurance processes through innovative approaches leveraging technology and data.

B Satishwar MD and CEO, Aegon Life Insurance, identified technology as a catalyst for growth in 2023, among others. “The industry, leveraging the power of artificial intelligence (AI) and other advanced technologies, transformed insurance from a complex necessity to a simple, accessible solution tailored to the diverse needs of the Indian populace,’’ he said.

The adoption of facial analytics and account aggregator models represents technological advancements leading to more empathetic and customer-focused insurance services, while also expanding the industry’s reach.

“The IRDAI’s expansion of the ‘Use and File’ scope has further empowered us to innovate, offering tailor-made products that cater to individual needs and preferences,’’ Satishwar added.

Bima Bharosa

To ensure protection of policyholders’ interest, IRDAIhas introduced a transformative initiative, ‘Bima Bharosa,’ which involves a substantial upgrade to the existing ‘Integrated Grievance Redressal System’.

The primary objective is to streamline and enhance the efficiency of grievance redressal procedures. A noteworthy aspect of Bima Bharosa is its commitment to linguistic inclusivity, allowing policyholders to log complaints in regional languages.

This strategic move aligns with the diverse linguistic preferences of customers, aiming to make the grievance redressal process more accessible and user-friendly. Recognising the dissatisfaction expressed by customers through various channels, including social media, the regulator’s close monitoring of Bima Bharosa is expected to instil greater confidence in policyholders by providing a comprehensive and responsive solution to their concerns.

Bima Bharosa is poised to establish a more transparent, efficient, and customer-centric framework for grievance redressal within the insurance sector, marking a pivotal advancement in safeguarding the interests of policyholders.

The Year Ahead

The New Year ahead could be a game changer for the insurance industry as the regulator lined up an ambitious plan of launching the ‘Bima Trinity’ as a part of its vision of Insurance for all by 2047. The primary objective of this initiative is building affordability and accessibility of insurance.

This project, which includes Bima Sugam, Bima Vistaar and Bima Vaahak, is expected to take off in 2024. Bima Sugam, which is an online marketplace encompassing the entire customer journey from buying to servicing, is expected to make accessibility of insurance much easier. Bima Vistaar promises to be a revolutionary insurance product which seeks to offer affordable protection to the masses. It is expected to be launched by January 2024. Bima Vaahak is a women-centric distribution channel at the gram sabha level that aims to empower women by educating them about the benefits of comprehensive insurance thus enabling their financial security.

Together, Bima Trinity will promote financial inclusivity, leverage digital to create an unmatched convenience, accessibility and simplification, affordable coverage, and foster higher participation of women in the insurance industry..

While the regulator has already given licenses to three new players this year, it is expected to allow entry of more companies going forward. IRDAI has said that it is looking to issue licenses to 20 new insurers in the immediate future. Additionally, the regulator is also likely to relook at the capital requirements, making entry of new players easy. With an increased competitiveness in the market, the sector will see more innovation, improved distribution models, automation and more.

One of the awaited developments of 2024 is that the government will table the Insurance Laws (Amendment) Bill 2022 as it has the potential to bring another round of positive reforms and bolster growth prospects of the industry.

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