The IRDAI (Insurance Regulatory & Development Authority of India) has just unveiled draft regulations for India’s cutting-edge digital insurance marketplace, “Bima Sugam”. Read on to know more…
Bima Sugam, an important part of Bima Trinity, is a dedicated product aimed at increasing insurance implementation and enhancing accessibility and affordability. The IRDAI visualises “Bima Sugam as a revolutionary digital product which will empower customers to simplify their insurance policy and render a smooth transactional experience to users.
With enhanced affordability, availability, & accessibility, Bima Sugam will reshape the general insurance market and emerge as the unrivalled online hub for insurance products and services. This ground-breaking initiative by IRDAI promises to reshape the landscape of the general insurance market and make it the largest online hub for insurance products and services.
Did you know?
The chairman of IRDAI envisions Bima Sugam as a potential “UPI moment” for the insurance sector, which underscores the regulator’s ambitious objective of achieving “Insurance for all by 2047” that perfectly aligns with broader goals of financial inclusion and stability.
What Is Bima Sugam?
Rescheduled to launch in 2024, Bima Sugam is equipped with a robust and scalable architecture that enables seamless integration with diverse services so that customers will face no difficulties in availing abundant services, including insurance purchases, filing claims, addressing grievances, and more.
The primary objective behind the launch of Bima Sugam is to eliminate the necessity for insured individuals to visit “Branches” to access insurance-related services. Though technology is evolving, many people in rural areas are still struggling to buy an insurance policy or pay their premium amounts.
However, with advancements in technology potentially reducing distributor margins, policyholders will benefit from potentially lower premiums. It is expected that premiums for both Life & General insurance on the Bima Sugam platform will be more cost-effective. Furthermore, IRDAI may offer discounts on policies purchased through the platform, which will promote greater accessibility to insurance products.
What Are The Salient Features and Benefits of Bima Sugam?
Here is the complete list of unique features and benefits of Bima Sugam.
Seamless Connectivity:
One of the key features and benefits of Bima Sugam is that it acts as an organised platform that helps facilitate seamless connectivity among all stakeholders, including insurance repositories, insurance companies, intermediaries, and more. This so-called initiative will provide a wide range of tools that will manage the insurance process without any difficulty.
Data Integration:
Just like our eCommerce giant Amazon, Bima Sugam will integrate automation and digitization into its framework. This includes features such as AI.ML and data analytics to optimize processes and improve decision-making. Not only does it help enhance convenience and accessibility but it will also help in reducing the dependency on paperwork.
End-to-End Protection:
Whether it’s safeguarding against unexpected medical expenses, protecting assets such as vehcile during travel, or securing financial stability through life insurance, Bima Sugam offers complete coverage to address various risks and uncertainties. With such a dedicated framework, customers can easily explore, compare, and purchase insurance policies that cater to their needs.
Real-Time Data Access:
Bima Sugam revolutionizes data accessibility for insurance companies by providing real-time access to validated and authentic data from multiple touchpoints. It ensures insurers will have updated information for the decision-making process while enabling them to assess risk accurately and enhance overall operational efficiency.
Robust Support:
The Life Insurance Council and General Insurance Council have announced their support for Bima Sugam. This initiative aims to address the shifting demands of the market and strengthen India’s reputation in insurance innovation. By supporting such an initiative, these councils are taking a proactive approach to modernizing the insurance industry and enhancing its relevance in today’s rapidly changing market.
What Are The Rules & Regulations Set by IRDAI?
The following are the rules and regulations laid down by IRDAI recently. Let’s discuss them below
Not-For-Profit Entity:
The first and foremost rule laid down by the IRDAI is that Bima Sugam will be established as a not-for-profit entity, in compliance with Section 8 of the Companies Act, 2013. To ensure a balanced and democratic governance structure, the shareholding will be distributed amongst life, general, and health insurers. This arrangement will prevent any single entity from acquiring a controlling stake in the organisation, promoting transparency, and fairness.
No Controlling Stake:
As per the draft document by IRDAI, Bima Sugam will not have a controlling stake held by any single entity which means it will have a balanced governance structure. The revenue model for this not-for-profit organization is designed to be self-sustainable, with no charges imposed on consumers for utilizing the marketplace services.
Risk Management Committee:
As per the Board, there should be an appointment of a Chairperson and Chief Executive Officer (CEO) for Bima Sugam, subject to the necessary approvals from the regulatory authorities. In addition, a risk management committee will be established to oversee and manage any potential risks associated with the operations and activities of an organization.
Encourages Feedback:
IRDAI is currently getting feedback from all stakeholders regarding the Bima Sugam proposals. This includes, but is not limited to, policyholders, insurance companies, and distributors. The input received will be invaluable in shaping the final regulations for the initiative while making the process efficient and better.
Positive Industry Outlook:
IRDAI has expressed its expectation from Bima Sugam that it will serve to protect policyholders and significantly expand the reach of insurance in India. By providing an accessible and user-friendly online marketplace, Bima Sugam will make it easier for individuals and businesses to find, use, and afford insurance products.
Conclusion
With the release of the draft regulations for Bima Sugam by the IRDAI (Insurance Regulatory and Development Authority of India), the insurance industry stands at the point of a digital revolution. As the final framework takes shape, it is no secret that Bima Sugam will catalyze transformative change in the sector. By providing a centralized, online marketplace for insurance products, Bima Sugam will make it easier for consumers to find, use, and afford the insurance coverage they need.
