`Debasish Panda, chiarman, IRDAI
The industry has now 56 primary players and 12 foreign reinsurers
“We would like to have many more players including micro insurers, insurtechs, niche and differentiated players who can operate with a much smaller capital and geographical areas to cater to needs of unserved , underserved and low –income group. I don’t believe in one size fits all policy,’’ he said adding that IRDA is considering to allow insurance companies to invest in insurtech companies
Bengaluru:
The Indian insurance industry, which has not seen entry of any new players in recent times, will soon be joined by eight new companies.
The insurance regulator IRDAI has cleared their first stage approvals in its recent board meeting.
“We have approved the entry of eight new players and will clear their final approvals in another two board meetings. There are no more pending applications for new licenses with us,’’ said Debasish Panda, chairman, IRDAI on Monday.
However, he did not provide any other details of these new players.
Panda was addressing an InsurTech Conference, hosted by the IRDAI, themed “InsurTech – Catalyst that Inspires” in the city.
The industry has now 56 primary players and 12 foreign reinsurers, he said.
“We would like to have many more players including micro insurers, insurtechs, niche and differentiated players who can operate with a much smaller capital and geographical areas to cater to needs of unserved , underserved and low –income group. I don’t believe in one size fits all policy,’’ he said adding that IRDA is considering to allow insurance companies to invest in insurtech companies.
With new eco-system that IRDAI is putting in place, which Panda described as a “revolutionary phase,’ the industry, which has almost reached Rs 10 trillion of premium income by the end of Fy2020-21, should be in a position to double it in the next five years .
“ Insurance sector is now at the inflection point after 22 years of liberalisation. We would like to see the doubling of premium in every five years and by 2047 as India celebrates its centenary year of independence, it should be a fully insured country where every family and small business are adequately protected in terms of life, health and other basic covers.”
The insurance industry has an asset base of Rs 50 trillion at the end of Fy 2021-22.
“The mass insurance schemes like Pradhan Mantri Suraksha Bima Yojana(PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana(PMJJBY) have helped insurance penetration to grow and we would like to plan more such schemes going ahead. We also want 70 per cent of India insurance premium should be generated from tier II and III cities by 2030,’’ he said.
The country has received Rs 28,000 crore foreign direct investment(FDI) in the insurance sector so far.
IRDAI is committed to see the industry growing at much faster pace and all the new processes including amendments in the Insurance Act to be completed in next few months,he assured.
“We are talking to the government to facilitate amendments in the Insurance Act. We are also now planning to set up a technology led innovation hub in the IRDAI. As a regulator, we will hand-hold and provide all regulatory supports, based on principle based regulatory regime, to the players, who want to serve the industry. We will facilitate their exchange programmes with various departments of the government. I am already discussing new plans with Ayushman Bharat Digital Mission (ABDM) which will be invited in the next insurance CEOs meet,’’ he said.
Panda stated technology can be used as extended arms to serve the needs of the low-income population, vulnerable sections, calamity-prone regions, MSMEs, Millennial population
“There is a need to leverage the data points from the various sources to enhance the underwriting process, improve claims experience for customers, able to design embedded insurance products, or value-added services,” he said adding that data, analytics and automation are way to go for the Indian insurance industry.
“In South Africa, 95 per cent of claims are settled through tech and paperless mode whereas in India it is 0.1 per cent,” he said.
`On the technological front, IRDAI has already initiated steps like revamping the Regulatory Sandbox to make it vibrant on a continuous basis rather than keep the window opened for a limited time.
“We will allow life products to be experimented for more than a year as it it takes time in life insurance while in non-life we considering to provide time frame of more than 6 months,” he said.
IRDAI will be soon reconstituting existing Regulatory Sandbox committee with relevant new professionals.
Insurance premium rate per milli for all occupancies should have a minimum rate after providing for burning cost, overheads and profits so that claims can be paid based on the loss assessed and not on a premium collected on the FY. The plight of PSU insurers barring NIA is a glaring example
The prime focus of regulator is to increase insurance penetration which has barely moved from 0.58% in 2001 to 0.94 % in 2021 ( non life).. this can happen only when the MSME sector starts contributing in a big way.. if they bring in minimum rates ( as prevailing in fire LOB with IIB rates) the poorer sector of the industrial society will be repelled from taking insurance.. on the other hand if heavy discounts are offered, then insurers won’t survive for long.. the regulator should instead focus on introducing more of government backed schemes / subsidies to start with, and gradually reduce their funding once the results stabilise..
DEAR SIR,
THANKS FOR THE ABOVE VALUABLE INFORMATION,
IF POSSIBLE OR WITHIN TERMS AND CONDITIONS PLEASE INFORM THE LIST OF 8 NEW PLAYERS
SANJAY PATIL
INSURANCE ADVISOR
RGICL/ NASHIK
Present companies give more liberty to prepare their products and offer benefits to customers and advisors who are working with a company for long periods
I heard IRDAI is going to allow all Advisors to do sell products of all companies. it’s dangerous, no one will do nothing because comparison will start and mis-selling will increase because people are greedy and agents who meet them give false information to get business
It happened earlier with ULIP Products.
Good information
There is an urgent need to bring in discipline and economical rationale in pricing that can compared with erstwhile TAC failing which the general insurance industry may not be able to improve their operating surplus which reveals financial soundness of the individual insurance. I request all the concerned authorities to focus on this point and save the general insurance industry from unhealthy and irrational competition in the matter of quoting the rates of insuranc products with due approval of Authority.
Every insurance company has an underwrting policy duly approved by its board, as part of Corporate governance. If the board does not implement this, for various reasons, they should be able absorb the losses without cribbing.! Such companies will vanish in the course of time. It is incorrect to expect an outside authority to control your business. This is my humble opinion . Thank you
Absolutely right . Over the years it is forgotten that even PSUs are in business. We are whipping them like whipping a nearly dead horse. It cannot run. And go with the same pricing. Even private players are doomed. Only foreign investors will survive if at all and they are not interested in our social welfare programs. It is high time IRDA (now headed by someone sensible and knowledgeable) should look into the severity of the issue
8 new players will be a good addition to the Indian insurance industry after a long gap
Good News. Hope for better Prospects,Healthy Atmosphere. and outlook. New Underwriters must
venture out in accepting the proposals being declined by the existing players.
Comparison wth South Africa on paperless claim settlement 1:950 times (India:SA) is pretty glaring. If all factors are codified, India with giant stride in Information Technology can easily c@tch up with S@
IRDA should consider allowing agents to work for multiple companies just like in mutual fund AMCs. This will bring better services to the clients and increase penetration of newer products . Currently newer insurers will have to search for newer agents to distribute their products as currently an agent can deal in only one General Insurance, One Life insurance and one stand alone health insurance company. This will also create newer employment by attracting freshers to this field.
Insurance agents should be allowed to place business with all the companies without any restrictions on the lines of brokers. As in the existing competitive market agents not only lose the business but also long standing association with their clients which is built over minimum two decades due to providing timely prompt advice and services building Trust which is a very crucial factor for maintaining client relationship.
It was thought some time back that once a agent takes a licence from one life insurance company he will be allowed to source a Life Insurance policy from any life insurance companies ( like the mutual fund advisor ) , but till now this concept is on Paper only.
Can we get to see this option in the near future…
It’s correct to say that one size fits all is not an ideal situation. Please implement this in Agency rules and allow open architecture in Insurance Industry so that an Advisor can recommend the most suitable product to the customer rather than the product of only one company which he works with.
Already brokers and insurance companies are ruining the market combindly by giving 50 to 60 % passbacks.. as Irdia is not able to control it due to unknown reasons which is a matter of investigation as big lobbying prevails in the organisation.
Mushrooming of players with poor regulations may lead to financial frauds and the gullible insuring public will suffer. This was the reason for Nationalization of 107 players in 1971 and the current disinvestment of the proposed 4 PSUs will only aggravate the risk with raising premiums and poor claim settlements in the absence of the competition from the Government sector coupled with the poor regulations. The regulator should mainly control the activities of the Insurance Brokers who are dictating the Insurance Companies and the Third Party Administrators fixing their prices with no new innovative insurance products. The regulator should expose the expenditure of the Brokers and the other service providers for quality services in the long run.
Health Insurance is growing exponentially and still has enough growth potential, thanks to the awareness created by the long spell of the pandemic. However, there is no match in the after-sales services (claims). Customer Grievance Redressal Dept set up in designated offices do not function satisfactorily and the tendency to drive the customers to litigation and to the Ombudsman’s door is very evident. It is high time a panel of competent retired Insurance professionals including a medical, is installed in every Grievance Redressal Center to help sort out the issues of the Policy holders and to boost up the sagging confidence.
Dear sir, It is better for all insurance that agents function like mutual fund advisors
Efficient and prompt after-sales service is also vital for adequate penetration.
No entity except TPA in Health Insurance segment,is introduced in the industry to deliver after sales services.The TPA model has failed to deliver due to its limited role and lack of responsibility in delivering efficient and prompt services.
The most of regulatory measures framed hitherto are related to marketing.
The services of Insuretech companies may be utilised deliver after sales service in other branches of insurance with a limited area of operations. An effective control of insurers in area of implementing loss controls,
area specific incurred claims ratio and profitability must be requisite for continuation their contracts with insurers.
All together it’s time for penetration only. Government is very keen to introduce high competition among existing players. We have recently seen more players in banking even though it was merger and acquisition all around in PSBs. Sign of penetration might be at the cost of unreasonable measures & unethical practices, negative competition, worst balance sheet, deterioration of asset base and manipulation of outcome (results) reflecting bomb growth which is illusion in a sense and indeed a vaccum. Here it’s turn for PSGIC after banking. In a 5 years time, you will see closing down of offices, movement of employees and unethical practices. Insuretech is going opposite to growth in core business segment looking to claim oriented mind set and less/nil regulatory control on private players.