The Insurance Regulatory and Development Authority of India (Irdai) has received 20 new applications for setting up life insurance and general insurance operations, chairman Debasish Panda said on Wednesday. Three new insurance companies that have registered with Irdai — two in the life insurance space and one in general insurance. Another 20-odd applications are in the process,” Panda said.
Panda was speaking at the Federation of Indian Chamber of Commerce and Industry’s annual insurance conference, ‘Winds of Reform’.
On March 31, the insurance regulator gave licences to CreditAccess Life Insurance Co and Acko Life Insurance Co to carry out life insurance business. Kshema General Insurance has recently been given a licence to carry out general insurance business.
The last general insurance company to have received an approval was in 2017, and the last life insurer in 2011.
As of February, total premium of the insurance industry hit Rs 10 trillion in 2022-23 (April-March) and assets under management of Rs 59 trillion, Panda said.
Going ahead, Irdai chairman expects the sector to grow by around Rs 5 trillion in the next few years with an increase in penetration of insurance products. “The new insurance regulations are making it more attractive for investors and promoters. I would also like to ask insurance companies to bring in more capital at a much faster pace,” he said.
Panda acknowledged that the insurance sector now looks more competitive form the perspective of return on investment and return on equity, and that the industry is seeing some merger activities.
Irdai recently approved new rules on the payment of commission to insurance agents or insurance intermediaries by insurers. It replaced the earlier individual cap on commission payments on insurance products with an overall cap on expenses of management of insurers. The move sought to provide more autonomy to insurance companies for managing expenses.
Separately, Panda urged insurers to engage with the Insurance Information Bureau (IIB) to mitigate issues related to business operations. “We have reached a point where we have to fulfil demands of insurance companies in terms of fraud mitigation, underwriting and claim processing and I urge insurers to engage with IIB more closely.”
He emphasised the need to develop more product solutions to the underinsured segment. He urged insurers to partner with insurance technology companies to develop customised products that cater to specific customer segments and geographic areas.
The regulator had notified the Irdai Regulatory Sandbox Regulations in 2019 with an aim to facilitate innovation in products and solutions proposed to be offered by insurance companies.