Buying motor and health insurance policies at zero commission may soon become a reality, as the Bima Sugam portal enters its final stage of launch. Narayanan V explains how the platform is likely to reshape the distributor ecosystem and ultimately reduce the cost of risk cover for consumers
What’s the latest update on Bima Sugam?
Insurers are in the process of developing motor, health and life insurance products tailored specifically for the Bima Sugam e-marketplace, which is likely to go live over the next few months. The move follows a meeting last week between Insurance Regulatory Authority of India (Irdai) Chairman Ajay Seth and the heads of life and non-life insurers, where companies discussed their roadmap for rolling out products on the platform.
The development of products for the e-marketplace signals that the much-awaited Bima Sugam portal is now in its final stages of launch, after facing delays of over three years since the idea of an Amazon-like platform for buying, selling and servicing insurance policies was first conceived.
Earlier, Irdai had launched the website of the Bima Sugam India Federation (BSIF), a not-for-profit entity set up to oversee the operations of the portal. The website launch came about a year after the appointment of former ManipalCigna Health Insurance MD Prasun Sikdar as the MD & CEO of Bima Sugam India Federation (BSIF), who has been tasked with driving the development of the digital marketplace.
When can you start buying policies on the portal?
The motor insurance products, which require relatively lower customer engagement and are easier to understand, are expected to go live on Bima Sugam in July. This will likely be followed by health insurance policies in August and life insurance products by September.
In the initial phase, the range of offerings will be limited, largely comprising basic motor insurance, simple health covers and term life policies. It will take another six months for the portal to be fully functional. The first stage is expected to include select product categories and core services such as e-KYC, purchase of policies and basic servicing functionalities.
Over time, the portal will expand its scope to include the full range of life, health, motor and general insurance products, along with services such as claims management, renewals, portability and grievance redressal.
What about the all-in-one product proposed earlier?
IRDAI has also nudged insurers to develop standardised products, while allowing differentiation in pricing, underwriting and customer experience. However, its broader vision of creating an affordable, all-in-one mass insurance product—priced at around Rs 1,500 and targeted at rural households—remains in limbo due to the lack of consensus among insurers on product structure and pricing.
The proposed ‘Bima Vistaar’ product, part of the Bima Trinity, aims to offer a basic social safety net by combining life, health, personal accident and property insurance features, but has yet to take off.
Impact on web aggregators
Industry players say online insurance aggregators such as Policybazaar, Acko, InsuranceDekho and Turtlemint may face some pressure, as Bima Sugam will offer comparison, purchase and even claims settlement features similar to what these platforms currently provide, albeit at a lower cost.
Irdai is pushing for significantly lower commissions on policies sold through the platform. Insurers have, in principle, agreed to offer “zero-commission” products on Bima Sugam, with only a nominal platform fee likely to be charged. This could incentivise insurers to route more products through the portal in a bid to reduce distribution and commission expenses—an area that has drawn attention from Irdai, the RBI and the government in recent months.
Traditional vs online sales
Intermediaries such as agents and brokers do not necessarily see Bima Sugam as a direct challenger, but rather as a potential partner that could help them manage sales and client portfolios more efficiently. Traditional channels remain strong as online sales and web aggregators accounted for less than 1% of the 3.98 lakh crore new business premium in 2024–25, while individual and corporate agents contributed about 83%.
In health insurance, the “online sale” channel accounted for 2% of the3.12 lakh crore premium, underscoring the continued reliance on intermediated distribution.
Other initiatives proposed
IRDAI is stepping up its efforts to fast-track the rollout of the Public Insurance Registry (PIR), aimed at strengthening the industry’s data infrastructure. The PIR, which will operate alongside Bima Sugam, will be the backbone of this emerging digital public infrastructure. As a consent-based data repository, it will enable insurers, regulators and customers to access standardised insurance data across the entire policy lifecycle.
However, it could face some pushback from the industry, as there is limited clarity on ownership of customer data once it is housed on a common platform. Insurers want stronger guardrails around data access, usage and consent. Industry players have flagged concerns around cybersecurity and operational control, given the scale of sensitive personal and financial data that would be stored on a centralised system.