IRDAI chief foresees major insurance industry transformation, urging more companies

IRDAI chairperson Debasish Panda

The next 10 years are of utmost importance for the insurance sector, said the IRDAI chairperson Debasish Panda at the Global Fintech Fest 2023.

"We'll see a radical change in the nature of insurance buyers. As the level of awareness is on the rise, we will see more and more customised products. This means, we need more players, more distributors and more capital needs to be infused in the sector," Panda said.

Emphasising that technology will be the binding factor for Insurance 2.0, Panda said that a slew of reforms and initiatives in the insurance sector are now creating an environment that fosters innovation, promotes necessary ease of doing business, reduces compliance and facilitates avenues for growth.

"Today, an insurance company can launch almost all types of insurance products without waiting for regulatory approval. It can even tie up with multiple distribution partners," Panda said.

As part of its Mission 2047 'Insurance for All', IRDAI is planning to launch Bima Trinity - Bima Sugam, Bima Vistar, Bima Vaahaks – in collaboration with general and life insurance firms.

Also Read: Bima Sugam: A platform that may transform the insurance business

"The life insurance and general insurance councils which are the self-regulating industry bodies are also gearing up to support the industry in a more efficient way. They are also working towards enhancing customer experience, particularly in health insurance by bringing 100 percent cashless claim settlement," Panda said.

Currently, insurers deduct 10 per cent or more during claims.

Ushering investments into the insurance sector

To facilitate more investments in the segment, Panda said that insurance companies' boards now have more flexibility and autonomy for taking operational decisions independently, and various redundant prior approvals have been dispensed off.

"The investment landscape is also being revamped to attract more investments in the sector. Be it in the increase in the limits for FDI, promoter status, or staggered lock-in requirements. Moreover, insurers can now invest in the funds of funds, alternate investment funds, debt instruments of INVITs and REITs, as so on and so forth," he said.

Earlier, an investment of over 10 percent in the paid-up capital of an insurer necessarily had to be made as a ‘promoter'. Under the 2022 regulations, the promoter threshold was raised from 10 percent to 25 per cent.