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Bima Sugam: A platform that may transform the insurance business

Bima Sugam is expected to usher in greater simplicity, security, transparency, trigger innovation, and level the playing field for all players. It is expected to do for insurance what UPI has done for payments

March 09, 2023 / 08:29 AM IST
The proposed Bima Sugam platform is backed by the insurance regulator IRDAI as well as the insurance industry

The proposed Bima Sugam platform is backed by the insurance regulator IRDAI as well as the insurance industry

As insurance leaders rise up to the demands of digital disruption, innovation becomes key to scaling and sustaining their businesses.

The traditional insurance business model is continuously evolving and changing the way products and services are delivered.

According to a recent Swiss Re study, the pandemic-induced spike in digital activity has resulted in more Indians buying insurance online. Buying insurance through traditional channels is a multi-step process and has always been cumbersome for customers.

Conducted across five major cities in India, the study shows that insurers can no longer afford to stick to an offline-only model. They need to transition to the digital realm to capture the attention of the Gen Z and millennial audience.

Another study by IDC FutureScape predicts that by 2024, 50 percent of all policies of non-life and life insurers will be sold through a fully automated, personalised insurance engine.

Also read | Bima Sugam may make policy buying easier, cut commissions

What is Bima Sugam?

In a bid to simplify and digitise the insurance marketplace, the Insurance Regulatory Authority of India (IRDAI) has proposed setting up an online insurance marketplace, called Bima Sugam. It’s like an e-commerce platform, where insurers can sell their products.

The direct-to-customer (D2C) platform will house all the companies that sell life and non-life insurance products under one roof. The aim of Bima Sugam is to provide an ‘end-to-end’ digital journey — right from buying policies, to renewals, claim settlement, and agent and policy portability.

Soft copies of the policies purchased by a customer will be available to him via an electronic insurance account.

The claim experience is expected to be better as all policy related information will be available on the portal and the insured or their nominee can easily access these while filing their claim. The portal will also smoothen the process of porting one’s policy or agent.

Also read | Why policyholders are unhappy with insurance companies

A plethora of benefits on the cards

From eliminating the need to fill lengthy forms, to cutting down commissions paid to intermediaries, Bima Sugam aims to address a number of roadblocks individuals face while fulfilling their insurance needs. It will also expand the reach of insurance firms and offer maximum convenience through a range of benefits.

Keeping policies safe and readily accessible

There’s a lot of paperwork involved when one goes through traditional channels such as agents and brokers. Bima Sugam will eliminate all this paperwork and make life simpler (and secure), as customers will no longer need to maintain any physical documents. Since no paperwork is needed, the process of renewals and claims will also become simpler.

Single window

Rather than visiting multiple websites, Bima Sugam will help customers review and buy policies from a single regulator-approved platform. This will help bring in more transparency and reduce instances of mis-selling and fraud.


At present, web aggregators get fixed commissions. But with Bima Sugam selling policies directly on its platform, customers will get the benefit of reduced commissions, and end up paying lower premiums.

Road ahead

According to a McKinsey report, 25 percent of the insurance industry will be automated by 2025 with the help of AI and machine learning techniques. In line with the regulator wanting to digitise insurance distribution in India, Bima Sugam will help the industry make great strides in scaling the insurance infrastructure. The portal is expected to transform the industry just as Unified Payments Interface (UPI) has revolutionised the digital payments ecosystem.

The key stakeholders in Bima Sugam are going to be the Life Insurance Council, General Insurance Council, public sector insurers and brokers' association, among others.

Bima Sugam was scheduled to go live on January 1, 2023, but the launch date has been postponed. Once it starts operations, it is also expected to help new-age startups which currently offer sandboxed products, and a level playing field for all insurers.

However, as with any project, Bima Sugam’s success will depend on how well it is executed.

Manoj Sharma is Co-Founder and Director, Policybazaar