With a mission of “Insurance for all by 2047” and the aim of increasing the insurance penetration in the country, the reforms recently announced by the Insurance Regulatory and Development Authority of India (IRDAI) would help in bolstering the ease of doing business and will aid in making the sector more investment-friendly.
Moreover, the relaxation of solvency norms for general and life insurers would also free up some significant capital for insurance. This will not only help the entire insurance ecosystem to grow rapidly, but also eventually give headway to insurers to invest in the right strategies.
“The increase in the number of tie-ups limits for Corporate Agents (CA) from 3 insurers to 9 and Insurance Marketing firms (IMA) from 2 to 6 will help in providing a wider gamut of affordability to the policyholders and help them come out with better customer centric innovations. The relaxation will also bolster competition, which will further enable corporate agents (CA) to sell more user-friendly products and services,” said Hanut Mehta, Founder & CEO – Bima Pay.
“These reforms announced will help organisations like Bima Pay improve access and help in facilitating better reach of the insurance ecosystem to the last mile delivery. It will also help to strengthen its distribution model and tap into the Tier 2 and Tier 3 cities and ultimately result in increasing the insurance penetration in the country,” he added.
“The new frameworks contemplated to be created by IRDAI will enable global investors to enter the market in India and thus bolster the Indian FDI which will eventually support in building the economy,” Mehta further said.
Talking on the expectations from the IRDAI board meeting, Mehta said, “I think it is imperative for IRDAI to open up the registration and consider relaxations on the Expense of management (EoM) limit. An increase in the maximum rate of renewal commission and the implementation of premium discounts for directly sourced policies will also be beneficial. This will not only help the entire insurance ecosystem to grow rapidly, but simultaneously also give immense flexibility for insurers with management expenses of lower than 100 per cent. This will eventually give headway to insurers to invest in the right strategies.”