IRDAI for academia & industry coming together to discuss issues

Insurance sector regulator, IRDAI has given a call for IRDAI for academia and industry coming together to discuss issues.

Debasish Panda, IRDAI Chairman, in his keynote address emphasized on the need of academia and industry coming together to discuss issues and coming up with strategies. He said that this summit will inspire the young minds who are ready to enter the sector, to understand the sector and its problems in a better way. He was addressing a summit which was held by National Insurance academy.

He further challenged the students to think of innovative, tech enabled ways in which India can cover up the protection gap at 83 per cent, solutions and strategies should help us leverage our digital assets, which is something students should focus on. More than 50 per cent of vehicles remain uninsured which is a clear indication of the unavailability of adequate insurance covers. He believes that the reins are in the hands of the younger generation to come up with innovative, efficient and tech based solutions. This can only be achieved through more focus on surveys and research.

The second area of focus should be product simplification and innovation. Tech based coverage, region based coverage have to be looked into because one size fits all is no longer applicable. The final challenge he addressed was to find ways to take care of out of pocket expenses which is still around 60 per cent.

He briefly touched on the topics of robust grievance redressal system, digitalisation of distribution channels and how opportunities are huge but we are not able to tap it specifically in the context of agricultural, disaster management and cyber insurance.

He said that the industry has been growing at 11 per cent CAGR for the last 5 years but to insure every person in India a highlighted importance of insurance as financial and social protection has to be worked upon. Only then can this industry contribute its part to economic and nation building. Economy is showing great resilience against pandemic and global political unrest, showing 7 per cent growth as opposed to the global 2.9 per cent, he believes the insurance industry should not be left behind. Growth momentum is expected to remain constant which is a golden opportunity for the insurance sector which can go from 10th largest to 6th largest.

He said that the insurance sector is constantly evolving. Ease in entry to the sector is seen now because of the extension of red carpet to investors, be it foreign or Indian. Ease of raising capital to maintain the solvency, flexibility in business operations are also areas IRDAI is working on. There has been a focus on cost of intermediation, choices provided to customers due to which IRDAI has moved towards use and file. An open architectural channel has been established.

Regulations have also shifted from rule based to principle based. Insurtech startups are being mainstreamed through sandbox methods. IRDAI is also working on Bima Sugam- a one stop shop for insurance, A women centric force of Bima Vahak, Hackathon, the shift to IFRS and other missions to focus on the three A's of insurance- awareness, accessibility and affordability.

He also mentioned the importance of improvement in claim experience and building customer experience and how feedback should be taken seriously all of which can help with the concept of 'Bima bharosa.'

He concluded his address by stressing on the point that to reach the last mile we need to go to the last mile and have to ensure that there are products available for each segment.

Devesh Srivastava, Chairman-cum-Managing Director, GIC of India, Chairman NIA Governing Board in his special address mentioned that India is rising steadily to become a global power which presents us with an opportunity and responsibilities. We are on the path to creating a world order that India aspires to see although we have miles to go before we reach there. India's geographical and demographic factors bring a lot of market potential.

He said that the insurance sector has a plethora of opportunities. A fully insured India is achievable where security is not just based on risk mitigation but also on faith and for that, we would need central support for better algorithmic models, staggered premium plans and not single premium policies.

He also mentioned that the vehicle ownership pattern is changing post-Covid-19 which would significantly impact the motor insurance market. We might be going towards a future where driverless cars would be a reality. Covid tailwinds have impacted the awareness of consumers in India. Health insurance numbers are growing significantly in retail lines.

He said that the distribution model is rapidly changing and the share of web aggregators is rapidly growing. Innovative distribution models are replacing the agency model and Digital insurance models are expected to witness growth because of product innovation and vibrant distribution models. Increasing FDI would lead to the fulfilment of capital requirements in India that would increase the overall penetration in India.

The pandemic expedited digital adoption as it created awareness amongst consumers, strengthening digital and financial infrastructure would play a pivotal role in fastening opportunities which would eventually lead to social and economic development.

Saurabh Mishra, Joint Secretary, Ministry of Finance, in his special address spoke about accessibility and affordability of insurance. Talking of coverage that is every person has an insurance policy which will only be achievable when along with the insurers, the people will also take a leap of faith and believe in the benefits that insurance provides, he mentioned Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jan Arogya Yojana has also hit the 70 crore mark.

He also focused on the need to simplify the insurance industry from the huge English jargons. Insurers will have to create simplicity for the public while using insurance-related products and mechanisms. These are a few things that can help us jump-start the penetration.

MR Kumar, Chairperson, LIC of India in his special address pointed out the importance of the insurance summit and the platform it provides to discuss global issues. He believes that the theme is an extremely innovative one that extensively tries to expand the opportunities for all the stakeholders in the industry and also will lead to a better India. If each element of the insurance industry works tirelessly to solve this problem it will soon be solved.

He said that even today only 3 in every 100 people in the country have a life insurance policy. Even though penetration increased during the Covid-19 pandemic, it still is very low and needs to be worked upon by industry leaders. In 2021, India also witnessed the highest growth in high net worth Individuals. This led to a huge increase in the consumer's appetite for better and more customized insurance products and thus, the insurers are looking forward to meeting these needs.

He said that the Pensions and Annuities are one of the most important components of the life insurance market. Swiss Re estimates show great growth and appreciation in this domain of Pensions and annuities. Investing in these products will benefit the industry immensely.

He focused that our consumers today want more customized and easy-to-use projects and they are also ready and willing to pay the premiums accordingly. AI, ML and blockchain are some of the new words which are constantly being used in this domain.

G Srinivasan, Director, NIA said that the changing risk dynamics including pandemics and climate change poses innumerable challenges as well as opportunities to the insurers to move beyond the current level of penetration and develop strategies to ensure a fully insured India. He assured that the summit will add a huge amount of knowledge to the people and will also navigate our way to finding new approaches which can help insurance reach everyone.