Insurers with robust tech to benefit from higher tie-up limit | The Financial Express

Insurers with robust tech to benefit from higher tie-up limit

Irdai’s board has approved some major changes the regulator proposed in the current regulations

Insurers with robust tech to benefit from higher tie-up limit
Industry experts said CAs and IMFs will establish tie-ups with more insurance companies to improve their portfolios. (IE)

Insurance companies equipped with robust technology platforms and product innovation are likely to be benefitted from the proposed increase in the maximum limits of tie-ups for corporate agents and insurance marketing firms.

According to industry experts, insurers with strong technology platforms and product innovation will have an advantage by way of reaching new customers, opting for innovative products and quick services.

Irdai’s board has approved some major changes the regulator proposed in the current regulations, including raising the maximum limit of tie-ups with insurers for corporate agents (CAs) from the existing three for each category of insurance – general, life, and health – to nine for each category. Moreover, the board has approved proposals to increase the maximum number of tie-ups for insurance marketing firms (IMF) to six from two in each line of business.

“It will encourage more tie-ups in the industry, and insurers along with corporate agents and insurance marketing firms can have a mutual integration to standardise policies and other customer-centric activities,” said Anil Kumar Aggarwal, MD & CEO, Shriram General Insurance.

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Talking to FE, Aggarwal said after the proposed changes come into effect, insurance companies will have a range of distribution channels to promote their innovative products. It will help insurers reach their customers at remote levels.

“As per the previous guideline, the new insurer had to wait for three years to get on board. The new initiative will remove this barrier as the number of tie-up limits has increased. Irdai’s decision will improve the ease of doing business and connect the untapped customer base through CAs and IMFs,” Aggarwal added.

Industry experts said CAs and IMFs will establish tie-ups with more insurance companies to improve their portfolios. Distribution channels will be equipped with more options to explain and add new customers.

“Robust distribution is pivotal to ensuring ‘insurance for all’. We expect that the increase in tie-up limits from three to nine life insurers for corporate agents and from two to six insurers for insurance marketing firms will enable millions of Indian families to have better access to insurance products to meet their needs,” ICICI Prudential Life Insurance Company MD & CEO NS Kannan told FE.

“We believe this also throws up enormous opportunities to expand partnerships for a customer-centric insurance company such as ours,” Kannan said.

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He said the regulator has rolled out significant and path-breaking regulatory changes. He believed these regulations would pave the way for significantly enhancing insurance penetration and enable the regulator to achieve its vision of ‘Insurance For All’ by 2047.

As the new open architecture allows CAs and IMFs to have more insurers on board, it will lead to product segmentation to provide the best value to the end customers, said industry insiders. It will help them to suggest the most suited products to the customers.

Policyholders will now have a range of choices and access to choose from life, non-life and health insurance products available with corporate agents and insurance marketing firms. They can compare the products and pick the one best fitted for their specific needs.

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First published on: 30-11-2022 at 03:40 IST