India will attain 100 years of independence by 2047 and Insurance Regulatory and Development Authority of India (IRDAI) has taken several steps in the last 10-12 months to enhance penetration and density of life cover plans.
“We are also working with the councils of both life and general insurance to have a UPI-like moment for the insurance sector. A conceptual framework has been contemplated,” he said, adding that this is being proposed through the Bhima trinity — Bhima Sugam, Bhima Vistar, and the woman-centric Bhima Vahak.
Speaking at an CII event here, Panda said IRDAI is moving from a rule-based approach to a principal-based approach, that the opportunity to invest in the insurance sector is immense given the size of the market, and low insurance penetration.
Sharing some of the reforms undertaken in the last one year, Panda said the authority introduced use and file system, stopped micro mangement of expenses, a lot of prior approvals done away with and reduction in regulations.
As many as 70-odd regulations have been repealed, 1,000-odd circulars have been done away with and rationalised 79 returns, he said. Such reforms have facilitated the ease of doing business, promoted healthy competition and encouraged the use of technology, he said.
Further, he said, to meet the distribution challenge, the authority has increased the number of tie-ups that insurance companies can undertake with banks.
Observing that Indian economy today is at an inflection point, he said, the country is among the fastest-growing economies in the world, with strong demographics, large domestic market size and a robust stock market, among others.
“Hence, there is optimism about India, which is drawing investors who are keen to establish a footprint in the sector. India has the largest market as it has 1/5th of the world population. Hence in a world starved of opportunity, India is a beacon of hope and this is rightly termed as the India Century,” he said.
Technology adoption is changing the insurance landscape in the country, he said, adding, the use of big data, AI, ML are impacting the sector in more ways than one.
The regulator is encouraging insurtech, regtech, and fintech to provide ease of insurance, he said.
Further, to reach the last mile, a state-level insurance plan is being proposed, limits on subordinate debt have doubled and exposure to the BSFI sector has increased, which would help in achieving insurance for all by 2047.
To enhance penetration, he said, we are also trying to do is to reach the last mile through state level insurance plans in line with State-Level Bankers’ Committee (SLBC) on the banking side.
It will identify the need for the state and accordingly develop plans.
“Depending on the potential and the protection gap, we are trying to create a state insurance plan which will further breakdown into district insurance plans and also trying to involve the state government in a similar manner what happens in the banking sector, state level insurance committee,” he said.
So, he said, once the state governments become equal partners in this effort towards reaching out to all, it will help reaching the objective of achieving Insurance for All by 2047.
In addition, he said, the government is considering amendment of the Insurance Act and that will enable entry of new players in the form of micro, regional, captive and specialised insurance companies and even composite licences can be granted.
By doing this, he said, “we will be able to cater to the different geographies and different strata of the population. So, if you look at the banking side, typically they have differentiating different types of banks also. So that they are focused in trying to address the needs of that particular geography or population.” Following amendment, he said there will be differential capital requirements.
“Then we have also recommended that currently the intermediaries or the distributors are required to come and renew their licence of the registration after every two years. So we have requested that the one time registration or a perpetual licence can be provided,” he said.