Delivering the inaugural address at a two-day national seminar on 'Insurance and Risk Management for the Corporate Sector - The changing scenario', Mr Rangarajan has suggested that large funds in the hands of insurers be invested to produce additional returns. The former RBI governor asked new players in the sector to harness the insurance sector's potential to the economy's advantage by bringing about imaginative corporate planning and a commitment to service. Insurance is one of the ways to reduce the risk burden of individuals and businesses, he added. Mr Rangarajan said that intense changes in technology may lead to serious damage to both financial and personal assets in the corporate sector.

In a changed scenario, he said, the insurance sector must bring about changes like product innovation, appropriate pricing, speedy settlement of claims and innovative covers for unusual risks. The role of a regulatory body for insurance companies in the changed environment will be to ensure quick settlement of claims without unnecessary litigation, Mr Rangarajan said. A well-developed insurance industry, he said, would promote economic growth by encouraging risk-taking. Mr Rangarajan also insisted that the regulator ensure the financial soundness of the industry.