Debasish Panda, Chairman, IRDAI, has said that the industry should take a call for making 'Insurance for All by 2047' a reality by increasing investments in the sector.
While speaking at the CII Annual Session 2023 held in New Delhi on Thursday, the Insurance Regulatory and Development Authority of India (IRDAI) chief said, "The insurance sector offers a huge market which provides a strong potential for growth of the sector."
He said most Indians have relatively-lower access to insurance compared to international markets, which indicates a huge potential for new entrants.
"Hence, the industry should take a call for making 'Insurance for All by 2047' a reality by increasing investments in the sector," stated Debasish Panda.
Elaborating further on the CII Annual Session theme of 'Future Frontiers: Competitiveness, Technology, Sustainability and Internationalization,' Panda mentioned that this reflected the spirit of India, which is aiming to rank high on competitiveness, technology use and sustainability through the credo of Vasudeva Kutumbakam and internationalisation.
Addressing the gathering, Panda said that the Indian economy today is at an inflection point.
"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," Panda said.
"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's Century'," he said.
Insurance provides a strong foundation of growth and is inseparable from the growth process, Panda said, adding it acts as a safety net for the poor, prevents debt distress, helps businesses to scale up, among others.
"Despite this, the insurance market is largely under-penetrated. The challenge is to double the penetration of the Indian insurance market in five to seven years and create greater awareness about insurance products," stated Panda.
He also said technology adoption is changing the insurance landscape in the country.
"The use of big data, artificial intelligence (AI) and machine learning (ML) are impacting the sector in more ways than one," he said, adding, "The regulator is encouraging insurance tech (insurtech), regulatory technology (regtech), and finance tech (fintech) to provide ease of insurance."
The IRDAI has undertaken several reforms with the aim of building availability, accessibility and affordability of insurance products for citizens, the chairman said, adding, "For this, the authority has adopted the use and file system, wherein it would be possible to launch life insurance products without the approval of the regulator."
The chairman said IRDAI has moved away from the micro-management of industry expenses, for example the cost of intermediaries, operating cost of management, created an overall limit for life, non-life, health insurance based on weighted average of 5-6 years, among others. Such reforms have facilitated the ease of doing business, promoted healthy competition and encouraged the use of technology, he added.
According to Panda, the number of regulations have to be reduced with the repeal of 97 circulars and rationalisation of 79 returns. "Further, to meet the distribution challenge, the authority has increased the number of tie-ups that insurance companies can undertake with banks," he said, adding, "Besides, the government is encouraging the use of technology platforms to reduce distribution costs and enhance the affordability of insurance products."
Chairman Panda indicated that the government has now moved from a factor-based to a risk-based solvency regime; from rule-based to compliance-based supervision and is transitioning towards becoming the global reinsurance hub.
The IRDAI recognises the need for further reform for which proposals have been sent to the government, Panda said, adding that some reforms include the proposal for changes in the Insurance Act to cater to different segments and geographies; allowing perpetual licence for distributors; and permitting insurance companies to offer value-added services.
Panda said that the authority is also working on creating a UPI-like moment for insurance. This is being proposed through the Bima trinity -- Bima Sugam, Bima Vistar and the woman-centric Bima Vahak.
Panda said, "To reach the last mile, a state-level insurance plan is being proposed, limits on subordinate debt have doubled and exposure to the banking, financial services and insurance (BSFI) sector has increased, which would help in achieving insurance for all by 2047."
Earlier, Sanjiv Bajaj, President, CII, said that there is considerable scope for investment by new enterprises in view of the large, under-penetrated insurance market where most citizens are outside the ambit of insurance. (ANI)