The Insurance Regulatory and Development Authority of India (IRDAI) has launched an ambitious plan that aims to ensure ‘Insurance for all’ by 2047. As part of the IRDAI Vision 2047, every state and union territory in India will have insurance penetration. The regulatory body is also planning to launch Bima Trinity – Bima Sugam, Bima Vistar, Bima Vaahaks – in collaboration with general and life insurance firms to streamline insurance activities.
IRDAI Vision 2047
The primary objective of the IRDAI Vision 2047 initiative is to ensure that every citizen in India has an adequate life, health, and property insurance cover. It further aims to support every enterprise with fitting insurance solutions. The vision is based on three main pillars, namely insurance customers, insurance providers, and insurance distributors.
To achieve these goals, IRDAI plans to make the right products available to customers, create a robust grievance redressal mechanism, facilitate ease of doing business, and align regulatory architecture with the market dynamics. The vision also aims to boost innovation, competition, and distribution efficiencies through digitization and a principle-based regulatory regime.
Significance of IRDAI Vision 2047
The initiative is designed to help households across India to obtain affordable insurance policies that cover health, life, property, and accidents. Offering rapid claim settlements within hours and additional benefits such as gym or yoga memberships, this vision could revolutionize the insurance sector.
Overview of Bima Trinity
Bima Trinity consists of three distinct components. Bima Sugam is a unified platform that amalgamates insurers and distributors to simplify policy purchases, service requests, and claims settlement for customers. Bima Vistar is a bundled policy covering life, health, property, and accidents with assured benefits for each risk category. On the other hand, Bima Vaahaks is a women-centric workforce at the Gram Sabha level dedicated to educating women about comprehensive insurance.
Current State of Insurance Sector in India
According to the Economic Survey 2022-23, life insurance density in India increased from USD 11.1 in 2001 to USD 91 in 2021. Global insurance premiums also rose by 3.4% in real terms in 2021, with non-life insurance recording a 2.6% growth. The insurance market in India is projected to be among the fastest-growing globally in the forthcoming decade. Consequently, insurance penetration in India rose by 11.70% from 3.76% in 2019-20 to 4.20% in 2020-21.
Challenges Faced by the Indian Insurance Sector
Despite this growth, the sector faces several challenges, including low adoption rates, lack of product innovation, and fraud. Further, talent management concerns, slow digitalization, and inefficient claims management processes pose significant hurdles.
About IRDAI
IRDAI is a statutory regulatory body established in 1999 to safeguard the interests of insurance customers. It oversees the development of the insurance industry and regulates insurance-related activities.
Future of the Indian Insurance Sector
To bolster the insurance sector in India, it is critical to leverage technology, align with customer behavior, optimize data usage, simplify claims management, adopt hybrid distribution models, and combat fraud. Prioritizing digitalization across the value chain can significantly reduce costs, enhance efficiency, and facilitate ecosystem development.