Building digital public infrastructure has emerged as a key priority for the government in recent years. You name a public service, and there is a portal for it. The Insurance Regulatory Authority of India (IRDAI) has recently announced the launch of an e- marketplace for insurance.
Bima Sugam is the new online marketplace for insurance in India. It is the one-stop shop where policy buyers can find different kinds of insurance products offered by the various insurance companies in the country. It is envisaged as the ONDC of insurance, resembling an e-commerce platform that will be backed by the government. Bima Sugam will see the incorporation of all popular insurance product categories, viz. life, health, motor, travel and other general insurances. The complete policy journey, starting with the selection and purchase of the policy to claim settlements and premium payments would become possible through the Bima Sugam platform.
The IRDAI has laid down the portal-related regulations in the new IRDAI (Bima Sugam – Insurance Electronic Marketplace) Regulations, 2024. The apex insurance body has issued this regulation with the following objectives,
Bima Sugam e-marketplace will operate as a not-for-profit entity, with shareholding held by Indian insurers with no single entity holding a controlling stake. It will have the following functionalities:
The insurance industry penetration in India is quite insufficient at 3.8%, compared to the global average of 6.5%. With massive ground to cover, the industry is growing at a rapid pace in the country. Insurance in India is growing at the fastest rate among all G20 countries. India is the 10 th largest insurance market in the world but is expected to become the 6 th largest by 2032. During 2024 and 2028, the growth rate of the insurance sector is expected to be 7.1%. The global insurance industry will grow at only 2.4% during this period. Premium during the next decade is expected to grow at 9% per annum.ts.
With unprecedented growth, the Indian insurance sector will benefit from the presence of a one-stop digital shop that covers the complete customer journey. Through the democratisation of insurance, Bima Sugam can help in the achievement of the “Insurance for all by 2047” goal.
Industry leaders in the insurance sector have been unanimous in their response towards the introduction of Bima Sugam. Bima Sugam is seen to have the potential to transcend barriers and enable every Indian to protect their financial future through insurance. The portal is also seen as a transformational change in increasing the accessibility and transparency of insurance products for Indian policy buyers. Insurance companies are anticipating that Bima Sugam will reduce the dependency on intermediaries and drive more direct sales for them. At the same time, intermediaries also have a reliable source to access any product information that they wish to pass on to the end user.
With all the key information on Bima Sugam put on a plate for you, let us now visualise the industry scenario with this introduction.
We get meals delivered through Zomato, groceries through Big Basket, apparel through Myntra and anything under the sun through Amazon and Flipkart. This online shopping and e-commerce preference among Indian customers can easily transcend into insurance products. The added incentive with Bima Sugam is that you can directly contact the insurance company. This will eliminate middlemen and reduce your premium cost. It also eliminates mis-selling, a common problem faced by customers in the agent and intermediary-driven model.
IRDAI is providing services through the Bima Sugam portal at zero cost. Customers can now buy and view all their insurance policies in one place, renew them as and when required and raise grievances and claims as well.
Readers would be correct to point out that we can still buy insurance products directly through the insurance company’s website. Nevertheless, people continue to buy through intermediaries. The truth is that people find insurance purchases a complex activity. A layperson often finds it difficult to understand the literature associated with insurance products, and the paperwork involved. This is why the importance of intermediaries will not be completely eliminated.
Bima Sugam will emerge as an all-encompassing platform for all matters related to insurance. It will provide a holistic meeting point for insurance stakeholders and make insurance purchases and information simpler for customers. While it is unlikely to replace the traditional and existing insurance value chain, it can be a game-changer in insurance transparency and accessibility in India.
https://timesofindia.indiatimes.com/business/india-business/irdai-gives-approval-to-set- up-insurance-e-marketplace/articleshow/108719980.cms
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