The IRDAI has undertaken several changes and reforms over the past year. Are these helping the end user and is it making a difference? Speaking at the FE Insurance Summit industry stakeholders hailed the changes but expressed concerns about the lack of guidelines on pricing.
Nitin Nair,Group Head – Insurance / RPG Enterprises said. “Changes by the insurance regulator have brought in a lot more freedom in the industry. It surely opens up opportunities for innovation and healthy competition. But insurance in India is still thought of as a cost. That mindset needs to change.”
Affordability of insurance policies is a key point of contention in this context. Many believe that without this it is difficult to execute the insurance for all objectives. Prashant Bhosale, Head, Corporate Direct Tax and Insurance, Thermax used the example of the renewable sector to highlight the concerns and said “The regulator has made changes to protect policyholders and bring about healthy competition. De-notification has brought the scope of insurance coverage in many niche areas like renewables, cyberspace. But there are ambiguities in terms of pricing, quality of risk assessment. We need SOP and clear guidelines from regulator for pricing in this context, especially for the renewable sector. Regulator needs to think of making insurance affordable to align with objective of insurance for all”
The insurance industry is using dynamic pricing to adjust premiums based on individual risk profiles and real-time data. But according to Neela Patel- Lead, Corporate Insurance- Tata Power this is not enough. She echoed Prashant Bhosale’s concerns and said, “Earlier there was no differentiation between companies adopting good practices and bad ones. As a result the entire industry was getting the same price/rate. However, in the last one year we have got relaxation. However, the power industry is facing challenges in terms of full cover for transmission lines. Covers are very basic and prices don’t take into account the unique sector challenges.”
Anisha Udeshi, Director, Global Insurance & Risk, Cipla is quite happy about IRDAI de-notifying several insurance tariffs. “It enabled us to have a dialogue with insurance companies and list out the risks that we want to get cover for. It also helped identify the risks which we know that we can keep/retain with ourselves. Real time risk analysis is a big positive for large manufacturing facilities. This also made real-time risk mitigation a possibility. The Regulatory sandbox regulations are a big positive,” she added.
But the small and medium enterprises are still on the lookout for guidelines that can cater to their concerns more effectively. Francis Rodrigues, Managing Partner and Principal Officer – M/s New Age Secure Insurance Marketing LLP pointed out that, “No specific products made for MSMEs. There is a need for evolution and changes happening for insurance companies in particular, especially in the casualty lines of business. No significant change for the MSME sector post the reforms undertaken by the Insurance Regulator, IRDAI. But do expect it to come in a few years.”